China favors some crypto exchanges before others, with Huobi rising as one of the favorites. Recent analysis of the Chinese crackdown against the crypto sector showed that not all companies were necessarily created equal.
Minor, Shady Markets Face the Worst Crackdown
Both Huobi and OKEx will see more favorable acceptance, commented Matthew Graham, CEO of Sino Global Capital.
Increasingly looks like China story is 1) Huobi and OKEx get *some* level of approval (“institutionalization”) 2) Binance and international exchanges mostly iced out 3) Small casino (“bucket shop”) exchanges like MXC and Biki get shuttered or chased offshore
— Matthew Graham (@mg0314a) December 2, 2019
Recent reports of Chinese authorities raiding the offices of crypto exchanges raised fears that all exchanges would face repercussions. But it turned out the most hostile attitude was given to small-scale, largely unknown operations.
Binance, which was caught in the recent debacle, for now remains cautious on entering mainland China, and offers its services to the international market.
Chinese trading remains relatively active. OKEx still carries above $528 million in daily trades, with days above $1 billion in activity. The exchange also carries one of the most active derivative markets, recently launching Tether (USDT)- settled futures.
Huobi reported $573 million in volumes, also down from peak activity. The exchange has been instrumental in the recent spike of enthusiasm for trading. The market also absorbed some of the haul of the Plus Token scam.
Huobi will also push to become a TRON Super Representative, joining one of the crypto projects that has been favorably accepted.
Huobi Wallet is excited to announce that we are officially running for #TRON SR. TRON is leading the way in decentralizing the web and Huobi Wallet is proud to be part of this movement.
Vote for us, let's buidl a better future with stronger TRON. @Tronfoundation @justinsuntron pic.twitter.com/Z3O996TOJy
— HuobiWallet (@HuobiWallet) December 3, 2019
Huobi Joins China’s Blockchain-Based Services Network
China’s stance on crypto organizations is paradoxical, as the country still tolerates gambling-based crypto projects. The Plus Token scam also ran for months, while the Cloud Token, another scheme of a similar nature, is currently active, based on recent reports.
At the same time, China is forming another government-backed body to organize selected companies interested in crypto-related services. The Blockchain-Based Services Network will be a state-backed body, comprised of mostly large-scale local companies, news agency Xinhua reported. Among them, Huobi will be the leading exchange.
The case of Huobi is special, as the market operator is still based in Southern China, in the Hainan province. At the same time, OKEx decided to operate from an offshore registration in Malta. The Huobi exchange has managed to survive in part because of its distance from the capital, suggested Dovey Wan, commenting on the situation of Chinese crypto exchanges.
The crackdown on some of the smaller exchanges, however, may dampen Chinese enthusiasm for trading.
And Bakkt' CEO Kelly Loeffler may be appointed to the Senate seat vacated👍🚀🚀
— Crypto Even (@Crypto_Even) December 1, 2019
At this point, it is possible that the heightened activity of Chinese traders may not be the only factor behind BTC appreciation. As futures markets grow, USDT-based speculation and altcoin rallies may give way to new forms of trading.
What do you think about China’s stance on crypto trading? Share your thoughts in the comments section below!
Images via Shutterstock, Twitter @Crypto_Even @HuobiWallet @mg0314a