Crypto trading giant Huobi has its offices located in China where it has been operating for years, particularly when the country was experiencing high crypto adoption. However, things have changed drastically in China as the government has now imposed a ban on crypto trading as well as crypto mining and these activities have been declared illegal. Therefore, there is increased regulatory risk for crypto companies operating from China and this has prompted a number of crypto brokerage firms to shut down their operations in the country. The latest name to have joined this list is Huobi and it is now considering Gibraltar for establishing its spot market business.
According to the announcement by Huobi Global, the company plans on moving their spot trading business from China to Gibraltar because it wants to leave the Chinese market. The exchange will first get the approval of the Gibraltar Financial Services Commission (GFSC) and then make the shift. The approval will enable the exchange to move its operations from China to its affiliate Huobi Technology based in Gibraltar. In this way, the exchange will be able to continue providing its crypto trading services via Huobi Gibraltar. The advantage is that this centralized digital asset exchange will have the approval of the GFSC and will be under its regulation.
Huobi Group’s co-founder, Du Jun said that the global crypto space was quickly moving towards a regulated and compliant ecosystem. Therefore, Huobi also wants to jump on the compliance bandwagon due to which it has made the decision to leave the Chinese market. Jun said that Gibraltar is a globally recognized, highly sophisticated, and experienced international financial services center and it would suit Huobi’s needs. A unanimous vote from Huobi’s shareholders on September 24th confirmed the decision of the company to move from China to Gibraltar.
Before the Chinese government’s crypto crackdown in the country, Huobi had enjoyed the position of the largest exchange. The exchange was founded in China and the country had served as its home market. However, the regulatory environment is now making things difficult and in this scenario, Gibraltar appears to be a good option because it is known to have a crypto-friendly environment. The crypto regulatory framework in the country is a robust one and this has attracted the attention of a number of crypto firms. The crypto crackdown in China was conducted from the end of September.
Due to this move, a number of companies have decided to close down their operations in China and are moving elsewhere in order to provide their services. The largest global exchange, Binance, also announced that it had prohibited the registration of new users from China. The exchange also announced that all existing Chinese users on the platform would also be phased out slowly by the end of the year. This was after the Chinese government had explicitly warned exchanges of allowing Chinese users to sign up for their services. Many other exchanges are following suit and Huobi is just the latest one to make this decision.