The culmination of many years of efforts to rein in the sector, 10 major Chinese government agencies, including the central bank, said last Friday that offshore exchanges were banned from providing services to Chinese investors online, which was previously a gray area. They vowed to co-root in “illegal” cryptocurrency activities.
Huobi Global and Binance, the world’s largest and most popular exchange among Chinese users, have stopped registering new accounts for Chinese customers. Huobi also said it will clean up those in place by the end of the year.
Even on the day we saw the notice, we started taking corrective action
Du Jun, co-founder of Hubei Group, said in a statement to Reuters.
Du did not give an estimate of how many users would be affected, all he said was that Huobi, once the world’s largest cryptocurrency, embarked on a global expansion strategy years ago and has seen steady growth in Southeast Asia and Europe.
Cryptocurrency-related stocks fell on Monday: Crypto asset manager and trader Huobi Tech fell 23 percent, while OKG Technology Holdings, founder of OKGCryptocurrency Xu Mingxing, a majority-owned fintech company, dropped 12 percent.
TokenPocket, the popular provider of crypto wallets, also announced in a notice to customers that it will discontinue services that violate Chinese policy for Chinese customers and “actively follow” regulations.
Many Chinese cryptocurrencies shut down or turned offshore in 2017 after China, once the world’s largest bitcoin trading and mining hub, banned such platforms from converting legal tender into cryptocurrencies and vice versa. Then, in May of this year, China’s State Council pledged to ban bitcoin trading and mining.
Amid the tightening, other types of Chinese cryptocurrency have moved out of China in recent months, said Felix Yang, founder and CEO of Babel Finance, adding that the impact of the latest policy will be “limited.”
The Chinese crypto service provider opened a new mall in Singapore this month.
Cobo, a crypto asset management and custody platform, recently moved its headquarters from Beijing to Singapore.
Cover photo: Beata Zawrzel/NurPhoto via Getty Images
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