Chinese crypto exchange Huobi is planning to re-enter the US market more than two years after shutting down 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, following previous mistakes, according to Du Jun.
“In 2018, we tried to enter the US market but we quickly pulled out because we didn’t have a strong commitment to the market at the time and we didn’t have a good management team in the US.” , Du said. a CNBC translation of his comments in Mandarin.
“I expect wealth management to become a bigger business than exchanges, which is just like the traditional financial markets,” he told CNBC, adding, “I don’t think exchanges are a factor.” necessary to enter the United States”
Du did not confirm which businesses Huobi will launch first upon re-entering the US A step back into the US market could put Huobi in competition with companies like Coinbase. According to CoinGecko, Huobi is one of the 10 largest cryptocurrency exchanges by trading volume globally.
Huobi first launched its crypto exchange business in the US in 2018. The following year, the company said it would freeze user accounts in the US and more that it will return to the market in a “more integrated and impactful” way.
Huobi Group owns an exchange business and an asset management business called Huobi Techlisted in Hong Kong.
The US push is part of a larger international expansion plan that follows several years of stricter crypto regulation in China, the market where Huobi was founded. Last year, Beijing fully considered Eliminate Cryptocurrency Mining in China and break the loopholes allows Chinese citizens to trade.
At the end of 2021, Huobi removed the accounts of existing mainland Chinese users and chose Singapore as its Asia headquarters.
Du said that Huobi lost about 30% of its revenue from shutting down users in China. But that gave the company even more impetus to expand internationally. They are looking to set up a headquarters in Europe, alongside an American push.
“As for how many resources or personnel we will deploy to the international market, we have no choice but to use our full strength to move forward in our global strategy. “, said Mr. Du. “In the past, we would explore a new market, and we could always withdraw our own money if it didn’t work out. Now, Huobi has no choice but to go global.”
Du praised China’s tight regulation of cryptocurrencies as it tackled gambling and money laundering cases. The Huobi co-founder says that the regulation protects smaller investors. However, he said other countries should not follow China’s approach as investors may be more mature in other markets.
“In China, when people lose money on their investment, sometimes the extremists jump out of the building of the regulator and less mature investors. The government has done it in a way. similar approach to limit Covid. The government has sensed the danger and has taken measures to protect the safety of the people,” said Mr. Du.
“In other regions, we could say that the investors are more mature. They have more experience and are responsible for their investment decisions and therefore the government in the markets. This does not need to take some strict measures.”
Global regulators are reviewing the rules for cryptocurrencies, from trading to how they should be taxed. This month, India proposes 30% tax rate of any income from the transfer of digital assets. Meanwhile, the US is still considering how to regulate cryptocurrencies.