Top Crypto Exchange Huobi Global has said it will suspend all China-based user accounts later this year. The exchange said in an announcement on Sunday that it has discontinued account registration for new users in Mainland China. This event comes after China’s central bank intensifies its crackdown on crypto activities.
Last week, China intensified a crackdown on cryptocurrencies. The country’s most powerful regulators, including the central bank, financial, securities, and foreign exchange regulators, said they will work together to root out all crypto-related transactions that are considered to be illegal financial activity. The People’s Bank of China also recently issued a notice stating that it is illegal for foreign exchanges to provide services to users in mainland China.
Exchanges Shutting Down Services In China
In its announcement, the exchange said “Huobi Global will gradually retire existing Mainland China user accounts by 24:00 (UTC+8) on Dec 31, 2021, and ensure the safety of users’ assets. We will inform users of the specific arrangements and details through official announcements, e-mails, text messages, etc.”
In May, Huobi has suspended its bitcoin mining service and sales of mining equipment in mainland China. In June, the exchange had to stop offering derivatives trading services to users in China. These were also due to China’s long-running crackdown on cryptocurrencies.
Huobi is one of the first major crypto exchanges that has reacted to China’s latest crackdown order. This order states that it will now consider all crypto-related transactions to be illegal. This includes services that let Chinese users exchange fiat currencies for crypto assets.
China’s largest cryptocurrency exchange, Binance, has also taken a similar step in response to the Chinese government regulations. It has restricted new users from mainland China from registering with Chinese mobile phone numbers. New sign-ups are still available for Hong Kong users on Huobi and Binance, but mainland China is no longer an option for new account creation.
Total crypto market cap at $1.96 Trillion | Source: Crypto Total Market Cap from TradingView.com
According to local news, a Huobi spokesperson refused to comment. However, there was a comment from a Binance spokesperson. They said the company does not have exchange operations in China and blocks Chinese IPs, without commenting on the mobile registration move.
“Binance takes its compliance obligations very seriously and is committed to following local regulator requirements wherever we operate,” the spokesperson said in an email.
China’s Crypto Ban
China is one of the world’s largest cryptocurrency markets. However, the Chinese government has not been receptive to the concept of crypto for years now. It has once again reiterated its stance on cryptocurrency trading activities. The central bank said virtual tokens such as bitcoin and ether are not legal tender. Cryptocurrencies “should not, and are not capable of being circulated in the market and used like currencies,” it said.
Trading cryptocurrency has officially been banned in China since 2019 but has continued online through foreign exchanges. However, there has been a significant crackdown this year.
Featured image from Business Insider, Chart from TradingView.com