Cryptocurrency exchange Huobi Global announced that it’s halting all services for its Singapore-based users only weeks after a Chinese state crackdown on cryptocurrencies forced the platform to stop its China operations.
On Tuesday evening, Huobi—the world’s sixth-largest crypto exchange by volume, according to CoinMarketCap—announced that “to comply with the laws of Singapore, we will have to include Singapore as a restricted jurisdiction. Regrettably, this means [we] can no longer offer services to Singapore-based users,” it said on its website.
The platform will close all the accounts of its Singapore users by March 31 of next year, and access to Huobi services will be “gradually phased out” starting on that date. Singapore-based users should take “immediate action” to close their active positions and withdraw all digital assets before then, Huobi said.
It wasn’t immediately clear what triggered Huobi’s pullout from Singapore. But the company said late Wednesday that winding down services in Singapore was “planned” so it could set up Huobi Singapore—a new, regulated entity expected to launch by year-end.
In a statement, executive director and CEO of Huobi Singapore Edward Chen assured local users that “Huobi Singapore is here to stay for good…and we are excited to launch a new platform…committed to complying with both local and international regulations to provide a regulated and safe trading platform for retail and corporate users.”
Singapore has taken a more welcoming approach to cryptocurrency than some of its regional peers. The Monetary Authority of Singapore (MAS)—the city’s de facto central bank—licenses cryptocurrency exchanges and related firms.
Huobi Singapore is registered under FEU International, which falls under Hong Kong–based Huobi Technology. The MAS has granted the platform an exemption from holding a license while its application under the Payment Services Act is under review.
In total, 170 crypto firms have applied for licenses with the MAS, including Huobi competitors like Coinbase and Kraken. Global exchanges like Bybit and KuCoin have also set up their headquarters in the city.
The “best approach is not to clamp down or ban these things,” said Ravi Menon, managing director of the MAS in an interview with Bloomberg on Nov. 1.
Instead, Menon advocates for “strong regulations” for what he calls “crypto tokens.” The MAS is bullish on crypto and blockchain’s potential, particularly in expediting cross-border payments and trade finance, but has warned retail investors not to treat the “tokens” as an investment asset.
Du Jun, Huobi’s cofounder, helps run the business from Singapore.
Huobi’s new plans for Singapore follow the platform’s decision on Monday to relocate its spot trading services from Seychelles—where it was operating as a registered but unregulated entity—to Gibraltar to “align with…the global crypto industry moving towards compliant growth.”
A month earlier, the company stopped providing services to mainland China users after the country’s top regulators intensified their crypto crackdown, explicitly banning the trading and mining of all cryptocurrencies. It was China’s second action against the digital coins this year. In May, China forbade financial institutions and payments providers from offering crypto-related services.
From May to October this year, Huobi’s overall trading volume dropped 74% to $211 billion, says data from CryptoCompare.
In an interview with the Financial Times on Monday, Du acknowledged that the shuttering of Huobi’s China services would lead to a 30% drop in revenue. Huobi is “in the process of stopping servicing all our Chinese users. There will be no Chinese users on the platform…So our revenues from [these clients] are going to zero,” he said.
The crypto platform is now scouring for international business in crypto-friendly markets, like Russia and Latin American countries, Du told the FT. Huobi still operates crypto exchanges in Korea and Japan. In Hong Kong, it operates Huobi Technology, which sells electronic hardware and blockchain solutions, and Huobi Asset Management, which offers crypto-related investment funds; neither entity offers trading services for retail investors.
In recent months global regulators have pushed back against cryptocurrency exchanges like Huobi and related firms, arguing that more transparency and regulation is needed to mitigate the risks of the crypto market.
The story has been updated to include a new statement from Huobi.
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