Major Exchanges Wrap up Efforts to Retire Chinese Users
China’s top exchanges Huobi Global and MEXC Global have taken additional steps to ensure their respective users in mainland China conform to new crypto regulations and vacate their respective platforms.
Like many others, the move by the two key exchanges – Huobi which is the largest exchange in the country and MEXC as the largest altcoin exchange in the Chinese region – is prompted by China’s recent declaration that crypto transactions have become illegal in the country.
MEXC this week announced that it has signed agreements with some international investment funds which will see the exchange’s original management team withdraw their control while its Chinese users are cleared by the end of December.
“The adjustments of (the) corporate governance structure is in progress under the guidance of the new established united board of directors. The new diversified leadership team will be adopted, and the former team will gradually exit after retiring Mainland China user accounts.”
For Huobi, in its bid to complete the elimination of its Chinese users, the exchange says it will now charge management fees to affected users who still do not withdraw cryptocurrency after the due date.
Huobi plans to complete the liquidation of its Chinese mainland users on December 31. However, users that still have funds on the exchange after February 15, 2022 will start to be charged “account management fees with reference to the usual practices in the industry,” the company has stated. The generated income, it adds, will be transferred to a “Huobi Public Welfare” account that will be publicized.
The account management fee will be charged monthly after a snapshot of the capital sink of every Chinese mainland user (including for all their accounts on the platform) is taken and data recorded within 15 days.
The standard account management fee will be 0.2% of the snapshot capital monthly or charged accordingly to a single account that is less than 1USDT.
According to Huobi, a Chinese mainland user is anyone having their registered nationality, their OTC nationality, personal authentication nationality or institution certification nationality as “Chinese mainland”.
The account management fee could be charged separately from the mother and child accounts on the platform where applicable or from any sub-account that satisfies the receivable. Only accounts that are frozen or restricted for special reasons that are exempted from the account management fee or those whose assets have been withdrawn.
Huobi is the first major exchange with links to China to first act on eliminating existing Chinese users. It announced that it has ceased account registration for new users in Mainland China effective September 24 and will gradually retire existing Mainland China user accounts by Dec 31.
Most crypto exchanges with roots in China have cited compliance with the regulatory requirements as the main factor behind their plan to terminate users from mainland China. Another Chinese exchange with the same plan for users in mainland China is KuCoin. It seeks to complete their retirement by December 31 “under the premise of ensuring the safety of user assets,” the exchange states.