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The Exchange’s Actions Are Corresponding To The Massive Crackdown On Cryptocurrencies By The Chinese State

One of the leading crypto exchanges, Huobi, had to participate in what appears to be an unprecedented ban on crypto-related activities in China.

According to Huobi’s updated User Agreement, the Seychelles-based exchange puts China among the countries, which fall under Huobi’s list of prohibited jurisdictions for derivatives trading. However, spot trading for Chinese residents is still available.

Huobi also updated its terms of service (ToS), effectively banning Chinese residents from using Huobi’s crypto derivatives products. Furthermore, in order to comply with the renewed regulatory guidelines in the country, Huobi reduced futures leverage levels available to users from 125X to 5X and restricted new Chinese users from accessing derivatives.

“In order to protect the interests of investors, a portion of services such as futures contracts, ETP or other leveraged investment products are temporarily unavailable to new users from a few specified countries and regions,” Huobi announced.

Chinese traders already began seeking alternative exchanges, as derivatives are a crucial product in the Chinese crypto industry, and they define the competition between the biggest exchanges.

The crypto restrictions in China pushed traders and investors to seek alternative trading options such as OTC desks.

The outflow may shift towards the use of decentralized exchanges (DEXs) as viable trading platforms. The Chinese Communist Party, however, is aiming directly at prohibiting all crypto-related activities, except buying and selling.

Meanwhile, Rachel Lin, CEO of SynFutures DEX, noted that Chinese trades have begun to get familiar with decentralized crypto trading platforms. The outflow from centralized exchanges began in October 2020, when OKEX abruptly suspended crypto withdrawals on its platform for five weeks.

Huobi’s moves follow a policy change for Chinese authorities. In recent months, numerous reports of crypto-related censorship began roaming the mainland. Some of the reports noted that Internet giants like Baidu, Sogo, Zhihu, and Weibo have been blocking specific crypto sites and banning any crypto-related search queries.

Cryptocurrency exchange Cryptocurrency Regulations Huobi Exchanges News trading china exchange crypto trading dex Decentralized Exchange

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