Huobi – a former Chinese cryptocurrency exchange – wants to re-establish itself in the United States as an asset manager after shutting down operations in the region in 2019. The company expects asset management to be “a bigger business” than the exchange’s approach.
Return of Huobi
Co-founder of the Du Jun company revealed Huobi's new plans in an interview with CNBC on Monday. He said that the bag initially left the North American market due to a lack of commitment and poor management by the team in the region. In December 2019, the company abruptly announced that “the operation would cease so that it could return in a more integrated and impactful way”.
However, the exchange recently closed accounts for its existing users in mainland China after a total ban on cryptocurrencies in the country last year. It has since moved its Asian headquarters to Singapore, with plans to expand again to the US and Europe.
“Cryptocurrency is a big industry, and exchanges are just one part of that industry, which is more exposed,” Jun said, 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 also reflects the traditional financial market.”
Huobi's finances haven't looked good since it ceased operations in China, losing 30% of its revenue since then. Under the circumstances, Jun said Huobi had to abandon its initial strategy of exploring new markets individually and withdrawing if it doesn't work. “Now, Huobi has no 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 banning digital assets, spreading fear across markets and the media. Now, he has kicked out most of the miners and major exchanges in the region, which has massively crippled Bitcoin’s hash rate over the past year.
Despite being an industry player impacted by such an application, Jun truly respects China's heavy-handed approach to the industry. He said they helped fight gambling and money laundering in space, 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 your investment decisions.
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