Huobi Global, a cryptocurrency exchange situated in Singapore, has stated that it is suspending all services for its Singapore-based consumers, just weeks after the platform was forced to shut down its China operations due to a Chinese government crackdown on cryptocurrencies. Huobi, the world’s sixth-largest crypto exchange by volume, said on Tuesday evening that “to comply with Singapore’s legislation, we will have to include Singapore as a restricted jurisdiction.”
“Unfortunately, this means [we] will no longer be able to provide services to Singapore-based users,” the company announced on its website. By March 31, 2019, the platform will close all of its Singapore users’ accounts, and Huobi services would be “gradually phased out” commencing on that date. Users in Singapore should take “urgent action” to terminate active positions and withdraw all digital assets before the deadline, according to Huobi.
Huobi’s decision to leave Singapore remains unknown. Beyond the formal statement issued on Tuesday, the firm declined to comment. Huobi’s decision to leave Singapore is unique because the city-state has been more friendly to cryptocurrency than some of its regional counterparts. Cryptocurrency exchanges and related businesses are licenced by the Monetary Authority of Singapore (MAS), the city’s de facto central bank.
Huobi operates in Singapore through its wholly-owned subsidiary FEU International, which has applied to the MAS for a Payment Services Act licence. According to the MAS website, FEU was granted a regulatory exemption “from holding a licence… for a certain term. [FEU isn’t licenced] to provide specific payment services, but [is] authorised to operate to continue to provide the specific payment services.”
The MAS has received 170 applications for cryptocurrency licences, including Huobi competitors Coinbase and Kraken. Global exchanges such as Bybit and KuCoin have also opened offices in the city. In an interview with Bloomberg on Nov. 1, Ravi Menon, managing director of the MAS, remarked that the “optimal strategy is not to crack down or ban these activities.”
Menon, on the other hand, is a proponent of “strict regulations” for “crypto tokens.” The MAS is optimistic about crypto and blockchain’s prospects, especially in terms of speeding up cross-border payments and trade financing, but warns retail investors not to use the “tokens” as investment assets.
Huobi’s co-founder, Du Jun, works from Singapore to assist operate the company. Huobi’s plans to leave Singapore come after the platform announced on Monday that it would shift its spot trading services from Seychelles to Gibraltar in order to “align with… the global crypto sector heading towards compliant growth.”
After the country’s top regulators intensified their crypto crackdown, specifically outlawing the trade and mining of all cryptocurrencies, the company stopped providing services to mainland China users a month ago. China’s action against digital currency was the country’s second this year.
China banned financial institutions and payment service providers from providing cryptocurrency-related services in May. According to data from CryptoCompare, Huobi’s entire trade volume fell 74 percent to $211 billion from May to October this year.
Du stated in an interview with the Financial Times on Monday that shutting down Huobi’s China services would result in a 30 percent loss in income. “We are in the process of ceasing to serve all of our Chinese users,” Huobi said.
He stated, “There would be no Chinese customers on the site… so our earnings from [these clients] will be nothing.” According to the Financial Times, the crypto platform is now looking for international business in crypto-friendly areas such as Russia and Latin America.
Huobi maintains cryptocurrency exchanges in Korea and Japan. Huobi Technology distributes electronic devices and blockchain solutions in Hong Kong, and Huobi Asset Management sells crypto-related investment funds; neither entity offers trading services to regular clients. In recent months, global regulators have fought back against cryptocurrency exchanges like Huobi and associated firms, arguing that the crypto sector requires greater transparency and regulation to avoid risks.
