China’s largest cryptocurrency exchange, Huobi, has finally given up on finding ways of retaining operations in the country. This decision was made known by the company’s co-founder, Du Jun who clarified that after several attempts, Huobi has given up on negotiations with regulators on the subject. 

In the past, we had been communicating with regulators to see if there are still ways to legally operate in China. But this time, there’s no room for discussion. Our strategy is all about going global now.

China’s government dishes final blow on cryptocurrencies

China’s resistance to cryptocurrency activities reached a peak on the 24th of September 2021, when the country’s apex bank, the People’s Bank of China (PBoC) announced a blanket ban on all cryptocurrency activities. This announcement kickstarted a domino effect that resembles the final crypto clean-up in the region.

Before now, most exchanges that started and operated in China had long relocated their headquarters. The few of them that remained only left behind skeletal services that serve customers in the region. Huobi on its own had since moved its headquarters out of China to Seychelles, but still maintained business relationships with many Chinese customers.

In the wake of the latest announcement by the PBoC, things changed. Many of the remaining exchanges, including Huobi, activated a final exit process. First, Huobi stopped accepting new registrations from China. Any prospective user trying to register with a Chinese phone number was blocked.

Huobi activates plan for a total exit

Huobi also mapped out a timetable for its final shutdown in China, which will allow existing customers to properly adjust their relationships with the company, or completely terminate their association with Huobi. Included in the plans is that from 14th December, Huobi exchange users in China would no longer be able to make deposits. From 15th December, currency transactions from China will be prohibited, and on the 31st of December, trading in Chinese yuan (CNY) will be stopped completely.

Huobi was not alone in making such decisions. Other top exchanges like Binance also responded similarly. Both of these exchanges suspended account opening for newly registered users. Even Renrenbit, which is owned by acclaimed Chinese OTC king, Zhao Dong, activated an immediate total shutdown.

Huobi’s decision does not come as a surprise, as the exchange already started moving its business outside of China long before now. This has been the case since the long-running clampdown on cryptocurrency activities by the Chinese government spans a couple of years.

China means business this time

Huobi’s global expansion started in 2020, and already, 70% of its revenue comes from outside China. This time around, the exchange is going all out for a complete exodus, and this move is emulated by other smaller exchanges, perhaps in response to the intensity of the crackdown this time around by the government. It has been more intense than ever before, and practitioners may not want to take any chances.

As it looks, this exit by Huobi is a final goodbye from China. Withdrawing CNY pairs from the exchange is a move that Adam Cochran, a partner at Cinneamhain Ventures describes to be “pretty crazy”. According to him, while China ‘bans’ Bitcoin and trade speculation frequently, this year certainly seems to have had more teeth.