Huobi – a former Chinese crypto exchange – wants to re-establish itself in the United States as an asset manager after ceasing operations in the region in 2019. The company expects asset management to be “a bigger business” than the exchange approach.
Return of Huobi
Company co-founder Du Jun revealed Huobi’s new plans in an interview with CNBC on Monday. He said that the exchange initially left the US market due to a lack of commitment and a poor management team in the region. In December of 2019, the company abruptly announced that it would “cease operation so that it can return in a more integrated and impactful fashion.”
However, the exchange recently closed accounts for its existing users in Mainland China following an outright crypto ban in the country last year. It has since taken its Asian headquarters to Singapore, with plans to expand back into the US and Europe.
“Cryptocurrency is a large industry, and exchanges are only one part of this industry, which is exposed the most,” said Jun, according to a translation of his comments from Mandarin. “There are many possibilities. I expect asset management to be a bigger business than exchanges, which reflects the traditional finance market as well.”
Huobi’s finances haven’t looked good since ceasing operations in China, losing 30% of its revenue ever since. Given the circumstances, Jun said that Huobi has had to abandon its initial strategy of exploring new markets individually, and withdrawing if they don’t work out. “Now, Huobi has no other choice but to go global,” he said.
Admiring China’s Crypto Crackdown?
China is one of the most crypto-hostile countries on the planet. It has a long history of asserting bans on digital assets, spreading fear through markets and the media. Now, it has outright ejected most miners and major exchanges from the region, which massively damaged Bitcoin’s hash rate last year.
Despite being an industry player impacted by such enforcement, Jun actually respects China’s heavy-handed approach to the industry. He said they’ve helped tackle gambling and money laundering in the space while protecting small and inexperienced investors.
That said, he doesn’t recommend similar approaches in regions like the US, because the investment market is “more mature” and can take responsibility for its investment decisions.