Huobi closes entity in Beijing due to Chinese crackdown

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Chinese crypto exchange Huobi has dissolved Beijing Huobi Tianxia Network Technology Co., Ltd. July 22, according to a notice job on China’s national enterprise system.

The company, created by the founder and CEO of the Huobi group, Li Lin at the end of 2013, will retire it in 45 days. Li also leads the liquidation team, to which creditors must report their claims within the 45-day period. The entity has 10 million yuan ($ 1 million) of registered capital and a total of five subsidiaries.

Extinct exchanges

The move obviously comes amid the Chinese authorities crackdown on cryptocurrency trading and mining. Aside from mining operations, which are duly phased out, other crypto exchanges are feeling the pressure.

For example, the South Korean crypto exchange OKEx dissolved its China-based entity called Beijing Lekuda Network Technology Co., Ltd. June 24. OKEx founder Mingxing Xu oversees the company’s liquidation and compensation process.

Huobi and OKEx have both previously dealt with a proscriptive Beijing, moving overseas after authorities’ 2017 crackdown on crypto. Additionally, the OKCoin entity in Beijing also requested its disbandment last month, while one of China’s oldest exchanges, BTC China, announced it would stop trading.

The crackdown on Chinese cryptos

Earlier this year, Chinese authorities banned banking and payment institutions from providing services to crypto-related businesses. They said cryptocurrencies disrupt the normal economic and financial order, while “seriously damaging the security of people’s property.”

Soon after, authorities turned their attention to cryptocurrency mining, as mentioned above. Their reason given was to protect the country’s financial system while reducing carbon emissions. Once accounting for nearly 70% of global bitcoin mining, China’s ban has inevitably led to a mass exodus.

Despite its drastic turnaround towards Bitcoin and cryptocurrencies, China is very excited about their underlying blockchain technology. China is also among the most advanced in the world in terms of developing its central bank digital currency (CBDC). To that end, it hopes to be the most advanced country in the world for blockchain technology by 2025.

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