The US re-entry is part of a major global development goal, a further break from China’s regulations. In addition, Huobi plans to set up headquarters in Europe.
Seychelles-based crypto exchange Huobi is currently seeking to re-enter the US market. The exchange business halted operations in the US well over two years ago to comply with China’s regulations, its founding market. However, the company’s return may not be as an exchange business but likely through its asset management business – Huobi Tech. Listed in Hong Kong, Huobi Technology Limited is a global leader in assets management.
Huobi first introduced its crypto exchange business to the US in 2018. Thereafter, the company said users’ accounts would be frozen and returned in a “more integrated and impactful fashion.” Huobi Co-founder Du Jun commented that the company had to “quickly” halt its business in the US market due to a lack of “strong commitment.” Also, Du Jun said Huobi did not have an efficient management team in the US back in 2018.
Although Du Jun did not confirm which business will initiate the re-entry, he said:
“I expect asset management to be a bigger business than the exchange, which echoes the traditional finance as well. I don’t think exchange is a necessary element for entering the US.”
Coinbase (NASDAQ: COIN) will be a worthy competition for Huobi if the exchange business is reintroduced. Coinbase revenue is estimated at $8.5 billion for 2022, Huobi’s 24 hours trading volume is $1.52 billion.
Why Huobi Wants Back in the US Market
Beijing tried to eradicate cryptocurrency mining in 2021 and trade mechanisms. During this period, Huobi recorded a 30% loss in revenue by shutting down exchange operations. Eventually, Huobi pulled back Chinese users’ accounts and picked Singapore as its Asia Headquarters. The Beijing ban reawakened the need for Huobi to be universal.
While China’s regulations may have led to a loss for Huobi’s exchange business, Du Jun admits that the country’s strict rules guide crypto operations. These rules have broadly tackled cases of tax evasion, racketeering, and betting, thereby protecting small investors. Asides from this, mature investors who have other choice markets may not choose China if the regulations are not revised.
Speaking further on the reasons for the exchange’s re-entry to the US, Du said:
“…We have no other choice but to use our full strength to go forward in our global strategy. In the past, we would explore a new market and we can always withdraw ourselves if it doesn’t work out. Now, Huobi has no other choice but to go global.”
Regulators are currently considering global rules for trading and taxing cryptocurrencies. For example, India has proposed a 30% tax on any income from the transfer of digital assets. The US, on the other hand, is still in the process of finding how to regulate cryptocurrencies. Despite the staff and resources, it may have to deploy, Huobi is ready for the world stage again.
The US re-entry is part of a major global development goal, a further break from China’s regulations. In addition, Huobi plans to set up headquarters in Europe.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
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