Online brokerage firm Futu Securities has reportedly suspended crypto futures contracts and trading services due to regulatory concerns in China.
Futu Suspends Crypto Trading Service
On 17th June, Chinese media publication Sina Finance reported that Futu Securities is halting its cryptocurrency trading services in response to the growing regulatory concerns in China.
Apparently, the platform’s customer service reported that the suspension will affect major contracts including CME Bitcoin futures, one of the world’s earliest Bitcoin (BTC) futures contracts.
However, non-futures crypto products like Grayscale Bitcoin Trust and the Osprey Bitcoin Trust will be still available on the brokerage platform.
Futu is backed by Chinese multinational tech conglomerate Tencent.
During the first quarterly earnings call unveiled this month senior vice president Robin Li Xu told analysts that Futu would be applying for digital-currency-related licenses in the United States, Singapore, and Hong Kong.
The Beijing-based brokerage company apparently wanted to offer cryptocurrency trading, but for clients outside mainland China.
During the first quarter of the year, Futu saw its total revenues increasing from 349.4% year-on-year to $283.6 million with a global reach of 14 million and Q1 trading volume soaring to $289 billion, with more than 70% of the increase coming from Hong Kong, Singapore, and other overseas markets.
China Once Again Cracks Down on Crypto Trading
Chinese regulators have tightened restrictions that ban financial institutions and payment companies from providing cryptocurrency-related services.
Earlier this month, three financial industry associations in a joint statement from the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China in association with the PBOC directed their members not to indulge in any crypto services involving currency exchanges, registration, trading, clearing, and settlement.
Additionally, institutions are also prohibited from providing cryptocurrency saving, trust, or pledging services and issuing financial products related to cryptocurrencies with crypto information services, insurance, and derivatives trading being also banned.