Chinese cryptocurrency exchange Huobi plans to re-enter the U.S. market more than two years after ceasing operations to comply with regulations, one of the company’s co-founders told CNBC.
But the company may not launch an exchange and may instead focus on other areas such as asset management, after missteps last time around, according to Du Jun.
“In 2018 we tried to enter the US market but quickly pulled out because we didn’t have a strong market commitment at that time and we didn’t have a good management team in the States. States,” Du said according to a CNBC translation of his Mandarin comments.
“I expect asset management to be a bigger business than trading, which also echoes the traditional financial market,” he told CNBC, adding, “I don’t think that the exchange is a necessary element of entering the United States”.
Du did not confirm which Huobi company will launch first when it returns to the United States. A return to the US market could put Huobi in competition with companies like Coinbase. Huobi is one of the top 10 cryptocurrency exchanges by trading volume in the world, according to CoinGecko.
Huobi first launched a cryptocurrency exchange business in the United States in 2018. The following year, the company announced that it would freeze US user accounts and added that it would return to the market in a “more integrated and impactful fashion”.
Huobi Group owns an exchange business and an asset management business called Huobi Tech, which is listed in Hong Kong.
The US push is part of a larger international expansion plan after several years of tighter crypto regulations in China, the market where Huobi was founded. Last year, Beijing sought to completely eliminate cryptocurrency mining in China and crack down on loopholes that allowed Chinese citizens to trade.
At the end of 2021, Huobi retired existing mainland Chinese user accounts and chose Singapore as its headquarters in Asia.
Du said Huobi lost around 30% of its revenue due to the shutdown of users in China. But it gave the company new impetus for international expansion. It plans to set up a headquarters in Europe, in addition to its US push.
“Regarding the number of resources or personnel that we will deploy for the international market, we have no choice but to use all our strength to move forward in our global strategy,” said From. “In the past, we explored a new market and we could always walk out if it didn’t work out. Now Huobi has no choice but to go global.”
Du praised China’s strict cryptocurrency regulations as they tackled gambling and money laundering cases. The Huobi co-founder said the regulations protect small investors. He said, however, that other countries should not follow China’s approach as investors may be more mature in other markets.
“In China, when people lose in their investment, sometimes extreme people jump from the regulator building and investors are less mature. The government took a similar approach to Covid restriction. It sensed danger and took measures. measures to protect people’s safety,” Du said.
“In other regions, we can say that investors are more mature. They have more experience and they take responsibility for their investment decisions and therefore the governments of these markets do not need to take strict measures.”
Global regulators are considering rules for cryptocurrency, from trading to how it should be taxed. This month, India has proposed a 30% tax on any income from the transfer of digital assets. Meanwhile, the United States is still considering how to regulate cryptocurrencies.