According to observers, the closure of blockchain businesses could be due to regulatory worries, but it is unlikely to have a significant impact on the crypto industry. Huobi, one of the world's leading cryptocurrency exchanges by trading volume, is de-registering a company entity in Beijing, a move that has sent shockwaves through the market, with Huobi Technology's stock in Hong Kong falling 22% today.
According to a notice posted on China's National Enterprise Credit Information Publicity System, Beijing Huobi Network Technology Co. Ltd., which was founded in December 2013 with a registered capital of 10 million yuan (US$1.54 million), applied to a local authority last Thursday to be deregistered.
According to the notification, Huobi Chairman Li Lin will operate as the manager in charge of the Beijing entity's liquidation, and creditors will be required to disclose their claims to a team supervised by him. According to public documents, Li owns 70.5 percent of the Beijing company.
In an emailed response to a request for comment, a spokesman for Huobi Global said, “This is an entity that Huobi registered in Beijing years ago, in the early phases of development.” “Because this entity has not conducted any business operations, it is useless, and [Huobi] has filed a cancellation application.”
Huobi has been running its trading business outside of Chinese jurisdiction due to the restriction on crypto trading in mainland China. However, Beijing Huobi Network Technology continued to provide blockchain-related internet information services.
On Tuesday morning, discovered that an app called Huobi OTC, which the Beijing entity had submitted to Apple's App Store, was still accessible for download. “The Huobi OTC service is now available through the Huobi Global app. We plan to delete it from the App Store later,” Huobi told.
Huobi Technology Holdings Ltd.'s Hong Kong-listed stock dropped 21.88 percent following the Beijing entity's closure, closing at HK$9 today.
It isn't the first time a major cryptocurrency exchange has shut down a branch in China. Last month, OKEx applied to have Beijing Lekuda Network Technology, one of its mainland Chinese subsidiaries, deregistered.
Huobi was chosen by Chinese officials over Binance, at least according to Chinese state media. Huobi was recognized as a key part of the IT cluster in Hainan, a free-trade port in China, on Central Television Channel 13 last year.
According to some industry sources, the shutdown of Huobi's Beijing organization would have little impact on the crypto market because the Beijing company did not appear to be involved in crypto trading. It could be Huobi's attempt to clean up its China operations in order to meet regulatory standards, according to a crypto research expert.
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