A ban on cryptocurrency trading against the yuan has officially come into effect in China, forcing mainland bitcoin trading platform operators to turn to other Asian markets.
Huobi, once one of the largest bitcoin trading platforms in the world, said it has opened new offices in Hong Kong and Singapore to continue its exchange service and expand into global markets. A new entity called Huobi Korea was incorporated in South Korea to offer cryptocurrency trading against the local won.
Huobi founder Leon Li wrote in a blog announcement that Huobi Exchange, its primary trading portal, has ceased all cryptocurrency trading activities against the yuan. Huobi Exchange will only offer trading services between US dollar and cryptocurrencies for “qualified investors.”
Huobi’s mainland entity Huobi China, based in Beijing, will be fully be transformed into a blockchain-focused consulting and research service provider.
The company will continue to operate its trading business through Huobi Professional, which is headquartered in Singapore with a subsidiary in Hong Kong, Huobi Professional operates a pure crypto-to-crypto exchange and recently added support for USDT, a token issued by Tether and which is pegged to the US dollar. It plans to launch over-the-counter operations to support peer-to-peer trading.
Similarly, OKEx, the Hong Kong-based derivatives exchange from the team behind Chinese bitcoin trading platform OKCoin, is looking to tap into the large pool of Chinese investors who have resorted to peer-to-peer trading over messaging apps like Telegram since the crackdown. OKEx has already rolled out an over-the-counter trading platform.
In September, China announced a ban on individuals and organizations raising money through initial coin offerings (ICOs) and ordered the termination of cryptocurrency trading against the Chinese yuan by October 31.
Since then, Hong Kong-based cryptocurrency exchange platforms like Gatecoin have witnessed a surge in the number of new clients registering from mainland China.
But one country in particular that has emerged as a safe haven for cryptocurrency businesses is Japan. In September, the country’s financial watchdog approved 11 digital currency exchange platforms.
There are now at least 19 companies applying for a Japanese Virtual Currency Exchange license.
Zhao Changpeng, CEO of exchange operator Binance.com, told Bloomberg that he too is looking for local partners and even considering acquiring an operational exchange. Others including Beijing-based Bixin have also expressed interest.
Mike Kayamori, head of Tokyo-based Quoine, one of the 11 companies that were granted a Virtual Currency Exchange license in September, told Bloomberg:
“We’re talking to almost all of those guys. They’re all desperate now […] There’s a lot of Chinese retail people reaching out to us, but we can’t handle it.”