Huobi earns around 70% of its revenue from outside of China. Now it is looking to increase that.
Crypto exchange Huobi expects to have around 30% of reduction in its revenues due to the Chinese crackdown, according to a Financial Times (FT) article from Monday.
“Between late September to December 31 we are in the process of stopping servicing all our Chinese users. There will be no Chinese users on the platform . . . so our revenues from [these clients] are going to go to zero.”Du Jun, co-founder of Huobi
Around 70% of the revenue of the exchange was generated outside of China, even before the crackdown. To recover the losses, it is going to acquire customers in other places.
Huobi is looking to expand in Russia, Turkey, and Latin America to onboard more retail investors. On the other hand, it is focussing on acquiring institutional clients in the US and Europe.
Last month, $211 billion worth of digital assets changed hands on the platform, down 74% since the ban in May, as per a CryptoCompare report cited in the FT article.
Jun runs the company from Singapore and does not wish to have a global headquarters. He prefers a “decentralised structure”, with employees scattered around the world.
The exchange is also improving its compliance department to avoid any conflicts with regulators.
A report from the National Bureau of Economic Research says that Huobi is used as “a gateway for money laundering and other grey activities” because it does not comply with the Know Your Customer (KYC) norms.
But a spokesperson for the exchange claimed that users have to abide by “rigorous” KYC procedures to trade above a certain amount and convert currencies to digital assets.
News recommendation: No Conclusive Evidence, yet people continue to Claim India has 10 Crore Crypto Users