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TechPolicy

Cryptocurrency exchange Huobi halts derivatives trading in China as Beijing turns up heat

  • Huobi has added China and the United Kingdom to its list of prohibited jurisdictions to trade derivatives
  • This followed Huobi’s decision in May to suspend bitcoin mining services and sales of cryptocurrency mining equipment in China

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Huobi has added China and the United Kingdom to its list of prohibited jurisdictions to trade derivatives. Photo: Shutterstock
Coco Feng
Huobi, operator of one of the world’s biggest cryptocurrency exchanges, has added China to its list of prohibited jurisdictions to trade derivatives, as Beijing continues its crackdown on businesses related to bitcoin and other digital tokens.

Users in mainland China will be barred from Huobi’s derivatives trading services from this week, but existing clients can still use the exchange for spot trading. The news comes days after Huobi cut the amount of leverage available to users in the country to 5 times, down from 125 times previously.

These moves by Huobi, which was founded in China in 2013, signal that “it won’t provide products of high risk and leverage to Chinese users, complying with Beijing’s crackdown on cryptocurrencies to avoid financial volatility”, said Winston Ma, an adjunct professor at New York University (NYU) School of Law and author of the book The Digital War: How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace.

In May, Huobi was one of the first Chinese-founded platforms to suspend bitcoin mining services and sales of cryptocurrency mining equipment in the world’s second-largest economy.

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Huobi’s latest action has come on the heels of the decision by BTCChina, which ran the first cryptocurrency exchange in China, to leave the bitcoin business amid Beijing’s cryptocurrency crackdown. Last week, BTCChina said that it has “completely exited from bitcoin-related businesses” and that the firm sold its stake in the Singapore-registered bitcoin exchange ZG.com to an unidentified foundation in Dubai in May 2020.

Yang Linke, co-founder of BTCChina, said the company will invest in other blockchain-related businesses.

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