Cryptocurrency exchange Huobi no longer provides cryptocurrency derivatives trading services to citizens of China, the UK and several other countries. This is evidenced by the updated user agreement.
Huobi is probably the first cryptocurrency exchange to take the first step against Chinese traders being able to trade on their platform. This happened just a day after the country’s supervisors announced a new crackdown on Bitcoin mining, including trading activities.
Huobi is one of the most famous platforms for cryptocurrency traders and investors in Asia. However, following the new Chinese restrictions, the exchange reportedly banned Chinese users from entering contracts and options on its platform.
Although according to the document, Chinese residents can still trade cryptocurrencies on Huobi. According to the report, restrictive measures taken by Huobi only for users wishing to open positions in the derivatives markets.
Will others follow in Huobi’s footsteps?
It’s too early to say if other cryptocurrency platforms will follow Huobi’s lead. But banning users from using the futures and options space is definitely a huge blow. As the derivatives sector is undoubtedly a more lucrative destination for investors than the spot market.
During the 51st meeting of the China Central Commission on Financial and Economic Affairs, chaired by the organization’s director Liu He, the authorities discussed crypto mining in the country and allocated Bitcoin. This was the first time that a high-level government of a country has proposed a severe restriction on cryptocurrency mining.
After being developed by Bitcoin’s top bull and MicroStrategy CEO, Michael Saylor was optimistic about the entire episode. He believes that China’s ban could actually trigger a bull cycle for cryptoassets. In his tweet, he written in about the same vein:
«A crackdown on miners in China would radically reduce the carbon footprint of Bitcoin mining, increase the profitability of all the remaining #Bitcoin miners, reduce nagging China FUD, support progress toward our ESG goals, & drive up the value of $BTC. We should be so lucky…»
Huobi’s latest move has not affected the broader cryptocurrency market. However, his cumulative valuation fell to $ 1.5 trillion. And was still wobbling due to the previous negative series of events that unfolded immediately after the aftermath of Elon Musk.
Restrictions by the Chinese authorities
In May 2021, three associations under the country’s central bank issued a joint notice prohibiting companies from maintaining digital asset-related businesses.
In the same month, Vice Premier of the State Council of the People’s Republic of China Liu. He announced that the authorities intend to take action on cryptocurrency mining and bitcoin trading.
Later, the Xinhua news agency of China criticized digital gold and its mining methods.
Later, the state media clarified that operations with cryptocurrencies are possible if citizens are willing to take such a risk. At the same time, advertising of “profitable assets” is subject to tightening.
Recall, on May 24, it was announced that the Huobi mining pool was suspended for providing services to residents of the PRC.