After the Chinese authorities began to put pressure on the cryptocurrency industry, the two largest exchanges left the country. Huobi will liquidate the exchange operator, which was founded in China in 2013. The company did not clarify the fate of the China-based employees, but recalled company’s commitment to globalization. Thus, the Huobi trading platform will continue to operate, but will not be available to users from China.
Huobi’s management made this decision a month after OKCoin operator OK Group (OKEx) also filed for liquidation.
Thus, the Chinese cryptocurrency exchange Huobi was the last to make changes to its corporate structure in China. On July 22, they disbanded a company called Beijing Huobi Tianxia Network Technology. And will deregister it within 45 days, according to a statement posted on China’s national corporate system.
Huobi Group said in a statement that an old asset and a long-defunct company will be liquidated. Lenders invited to declare their claims against the liquidation group within 45 days from the date of the announcement. Huobi Group founder and CEO Leon Li appointed as the claims contact and head of the liquidation team.
In response to these developments, company’s shares fell more than 15%. Huobi Tech is an investment holding company that has several shareholders, a CEO and some subsidiaries like Huobi Group. But they not affiliated. And Huobi Group is the parent company of Huobi Global Exchange.
Huobi and OKEx banned derivatives trading
Also recently, Huobi and OKEx began to restrict access to some services to Chinese clients. And subsequently Huobi completely closed their ability to trade derivatives.
From this week, users in mainland China banned from using derivatives trading services. But existing customers can still use the exchange for spot trading.
Exchanges move to other countries amid increased crackdown by the Chinese government
The liquidation of legal entities will not affect the activities of the respective crypto exchanges, because both moved abroad several years ago. Huobi legally moved its headquarters from China quite a long time ago, and it is unlikely that this will affect the quality of the services provided. For several years now, Huobi Group has been based in the Seychelles. However, the decision to close the Chinese divisions made only now, when the country’s authorities intensified their fight against participants in the cryptocurrency industry.
That is, the closure of the Chinese division of the company occurs precisely against the backdrop of increased repression by the Chinese government against the entire cryptocurrency industry.
OKEx did the same by moving to another country and liquidating its legal entity in China.
Against the backdrop of repression by the Chinese authorities, BTC China, one of the oldest exchanges in China, also announced the closure of cryptocurrency trading in the country.
The People’s Bank of China recently closed the Beijing Tongdao Cultural Development Co. due to suspicions that she provided software for transactions with cryptoassets.