Huobi Global Accelerates Global Expansion After Exit From China and Singapore
The Huobi Group, the parent company of one of the world’s largest crypto exchanges, Huobi Global, is reshaping its business after stricter regulations impacted its operations in countries like China and Singapore. .
The company was started in 2013 by former Oracle IT engineer Leon Li and former Tencent Du Jun executive, both of Chinese descent. He announced on September 26 that he would âphase outâ existing mainland Chinese user accounts from Huobi Global by December 31 to ensure the safety of user assets. Chinese regulators banned all crypto-related services and criminalized crypto transactions in September.
The Huobi Group is also experiencing changes in Singapore. The company announced on Nov. 9 that it would stop all Huobi Global services for traders and cryptocurrency holders in the city-state, due to “stringent licensing requirements.” Huobi Global is phasing out its current service by March 31, 2022. It also requires registered users in Singapore to close their active positions and withdraw their assets before the deadline.
Shortly after the announcement, Huobi Singapore announced plans to offer digital asset trading services in the city-state. The company has already sent its request to the Monetary Authority of Singapore and is expected to begin operations by the end of this year, according to a press release.
Huobi Singapore, registered in Singapore as FEU International Private Limited, is a wholly owned subsidiary of Huobi Technology (Huobi Tech) Holdings Limited, formerly known as Pantronics Holdings Limited. The Huobi Group acquired a majority stake in Pantronics in September 2018 and in November 2019 the company was renamed Huobi Tech. The company has been listed on the Hong Kong Stock Exchange since November 2016.
âThe Huobi Group represents a larger set of companies and entities, only one of which is the Huobi World Stock Exchange. Besides the exchange, the company’s activities include public blockchains, wallets, mining pools, proprietary investments, project incubation, digital asset research, and more. Said a spokesperson for the Huobi group. KrASIA.
âThese businesses are not concentrated in one place. We operate them within a decentralized structure where management and employees are spread over several different sites, âadded the spokesperson.
Currently, the Huobi group also manages two other local exchanges: Huobi Japan and Huobi Korea. Although the impact of the restructuring of the Huobi Group in Singapore is not yet clear, the exit of Huobi Global from the Chinese market represents a reduction of about 30% in the exchange’s annual revenue, co-founder Du told the media more early this month.
Huobi Global isn’t the only exchange to have been hit by China’s crypto crackdown. Binance, the world’s largest crypto exchange, also announced that it will phase out the use of the yuan on its peer-to-peer trading platform by the end of December 31, in response to local regulatory requirements.
The loss of the Chinese market, which is home to the world’s second most active crypto community and user base with more than $ 150 million in digital assets managed by Chinese users, is forcing the Huobi Group to accelerate its global expansion. The company also plans to invest in emerging trends in the crypto industry, including GameFi and DeFi, with the intention of expanding its user base, said Jeff Mei, director of global strategy for the Huobi Group. KrASIA.
âWe were anticipating this regulatory policy in China and anything related to the crypto ban,â Mei added..
âHuobi has been aiming for global expansion since 2018. We have focused a lot on how we can fit into the biggest global market and how we can attract users in different countries and regions,â he added.
The Huobi Group is currently relocating its spot trading activities to Gibraltar, a British overseas territory located at the southern tip of the Iberian Peninsula, after deciding to leave China. The Huobi Group also has offices in the United States, Hong Kong, South Korea and Japan.
Mei said the company is targeting regions such as Southeast Asia and Europe. He also clarified the company’s interest in Turkey and countries that are part of the Commonwealth of Independent States (CIS), including Russia, Uzbekistan and Ukraine. âEurope is a huge market for institutional investors, especially for derivatives. For Turkey and the CIS region, there are many VIP traders who trade high volumes, âMei said.
âFor Southeast Asia, there is a large community of retailers. We already have a set of very high frequency users in Vietnam and Malaysia. So we will make more efforts in some countries in Southeast Asia which do not have strict regulations. For us, it’s really about the needs of the users, âMei said.
Bank on GameFi and DeFi
So what to play to win Infinite Axis generated more than $ 8.2 billion in transaction volume as of November 17, an array of other blockchain games have also sparked investor interest.
Huobi Ventures, the investment arm of the Huobi Group, allocated $ 10 million in September to a fund that invests in early stage GameFi projects. The fund came four months after the company announced another $ 100 million fund for DeFi projects. The DeFi Fund is a three-year initiative to enable Huobi’s venture capital division to acquire blockchain and early-stage DeFi projects in order to diversify Huobi’s offerings.
Together with Huobi NFT, the recently launched NFT marketplace by Huobi, Mei said the company is ready to attract more new users by creating a complete digital economy ecosystem. âWe believe GameFi and the Metaverse are channels for educating users,â he added.
However, Huobi isn’t the only one targeting the Metaverse. An array of tech giants and crypto companies have also been eyeing this space, which is often touted as the next iteration of the internet that will bring the physical and virtual worlds together within one space.
Facebook, now known as Meta, has announced the $ 10 billion investment in 2021 for its metaverse division, Facebook Reality Labs, according to its latest third quarter report. The tech giant predicted in its blog that it will take 10 to 15 years for the Metaverse ecosystem to mature.
As the decentralized finance industry evolves around the world, Mei says there is no reason to worry about the competition, but whether technology can keep up with innovative ideas. âTechnology moves fast and people have a lot of amazing ideas. Do we have the [right] technology to save and realize their ideas? “
Mei added that the current regulations are the second challenge hampering the growth of the industry. He believes that a better framework would be beneficial in spurring the massive adoption of crypto.
âWe need to work closely with regional governments and adjust our business plan to operate legally. These two things [catching up with innovative ideas and regulations] are closely related to what we see in the short term. Overall, it’s really about user education. We need to provide them with services and materials for them to learn and enter the world of crypto, âhe said.
When asked if the Huobi Group is considering an IPO, Mei said the company “hasn’t needed one yet.” âIf we became public, it would be for other reasons such as external cooperation or partnerships that we could not conclude in the private space. But for now, I think we agree on these fronts.