Amid the expanding Chinese crypto crackdown, former exchange giants in China, Huobi, and OKCoin have announced the closure of their Beijing subsidiaries.
Huobi’s “resolution of dissolution”
Beijing Huobi Tianxia Network Technology Co. dissolved its registration last week and informed the investors to liquidate their accounts within the next 45 days. This announcement was instead of “resolution of dissolution” and was made public through the National Enterprise Credit Information Publicity System’s website. Huobi Technology Holdings, a Hong Kong enterprise of the Huobi organization, saw a decline in share prices by 22 percent today.
Huobi’s Beijing subsidiary had remained a non-operational franchise for years and did not bring in much or any revenue, “Because this entity has not had any business operations, it was deemed unnecessary, which led to its cancellation,” a Huobi representative told South China Morning Post. After Beijing Huobi Tianxia Network Technology Co.’s shutdown, Huobi now remains with only 1/4th of its active subsidiaries.
OKCoin’s “normal adjustment of operational entities”
Huobi’s Beijing subsidiary shutdown came after OKCoin’s Beijing Lekuda Network Technology Co. June announcement of winding up all projects and liquidating user assets.
OKCoin and OKEx had a controversial history with the Chinese entrepreneur, Star Xu Mingming, and founder of both organizations. Upon OKCoin’s Beijing subsidiary closing services, a representative of Beijing Lekuda told South China Morning Post, that this closure is part of a bigger plan involving, “normal adjustment of operational entities”.
China’s Crypto Crackdown
China’s crypto crackdown is intensifying at a rapid pace, with an increasing shutdown of mining operations, and the miner’s migration. The Chinese Central Bank has also imposed a ban on the operations of software companies involved in crypto trading, along with the Central Bank’s warning to Chinese businesses against offering any kind of office space to virtual currency businesses. China’s government is also moving rapidly towards introducing China’s Central Bank Digital Currency as a replacement for the decentralized system of cryptocurrencies.
MicroStrategy CEO, Michael Saylor, took a stance against the Chinese crypto crackdown and said that crackdown on cryptocurrencies could prove to be a “trillion-dollar-mistake”. He highlighted how China’s crackdown has forced Chinese miners to migrate into North American nations to set up shop.