Huobi, OKEx Restrict Services for Chinese Clients Amid Govt Crackdown

Kavya  |  May 24, 2021

Huobi has restricted services for Chinese clients from selling crypto futures and using certain mining facilities, and OKEx has halted trading for its coin OKB in China. 

Huobi Restricts Services For Chinese Clients Like Mining Equipment

Only days after the Chinese government promised to impose restrictions on Bitcoin mining and trade, cryptocurrency exchanges Huobi and OKEx began restricting Chinese clients from accessing any of their services.

Huobi informed Decrypt that it has temporarily suspended crypto derivatives trading for "customers in some markets" to "protect the interests of investors," citing "recent competitive developments in the market."

Although the Huobi spokesperson did not directly state that Huobi has stopped derivatives trading in China, it is the only country where traders have reported restrictions.

According to the spokesperson, Huobi Pool, the company's mining pool operation, has restricted Chinese clients from purchasing and storing miners. It said that the restrictions are in place to “focus on the growth of our overseas presence.”

China’s Largest Exchanges Dedication To Regulatory Enforcement

OKEx has dropped 67% in the last week to $10.86. Huobi Token has also dropped by 63% in the last week, to $11.5.

After the Chinese government prohibited cryptocurrency exchanges in 2017, both exchanges left the nation. However, they continue to have a strong Chinese client base, and their parent companies are still based in China.

The Problems of Cryptocurrency in China

The sanctions come on the heels of two major announcements from China this week, both of which sent the cryptocurrency industry into a tailspin.

On May 17, three main Chinese payment associations - the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China - reaffirmed their adherence to a 2017 law that prohibits financial institutions from dealing with cryptocurrency. The organizations have released cautionary statements on cryptocurrency speculation.

Following the headline, which was commonly misreported as a new crypto ban, Bitcoin dropped to lows of around $31,600. The harm was exacerbated when the Chinese government announced on May 21 that it would crack down on Bitcoin mining and trading to "prevent and monitor financial risks." 

The announcement slashed Bitcoin's price, which had since recovered to about $40,000, by another 12%.

 

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