The move finalizes Huobi’s drawn-out shuttering of U.S. accounts as as it continues to push users to HBUS, which is based in San Francisco. Led by Frank Fu, formerly of Chinese photo editing app Meitu, HBUS has been operating within the U.S. since early last year.
Huobi Global will kick all of its U.S. customers off its platform later this month.
The cryptocurrency exchange announced it would freeze all U.S. accounts on Nov. 13, framing the move as a compliance step made to conform to U.S. laws and regulations. Huobi is recommending that customers transfer their assets to HBUS, the U.S. firm affiliated with the global brand.
“Our User Agreement expressly prohibits users in the United States from using our platform,” Huobi said of its main platform.
Huobi said all outstanding balances must be withdrawn by the Nov. 13, and offered to assist users holding amounts below the withdrawal minimum via customer support.
Customers can receive their funds in bitcoin or USDT, according to the announcement. Huobi also pledged to refund points card purchases at a 1:1 ratio in USDT.
Huobi’s account freeze parallels similar steps by other international exchanges. In June, Binance also cracked on American users, pushing them to a FinCEN-registered partner.
Huobi Indonesia Adds Fiat-to-Crypto Gateway in Bid for Global Expansion
Announced Dec. 27 in a press release, the Indonesian wing of Huobi Group looks to facilitate cryptocurrency trading in Southeast Asia’s largest economy.
According to the firm, Huobi Indonesia boasts 50,000 registered users, of which approximately 10 percent are active in daily trading. Approximately $374,000 was transacted in the most recent available daily data.
With this play, the Jakarta-based firm hopes to gain market dominance in Indonesia, said Xiong Dan, Huobi Indonesia CEO, in the announcement. Crypto exchanges Coinmama, LocalBitcoins, and Luno are frequently cited avenues for purchasing bitcoin in Indonesia.
Huobi’s gateway allows users to swap Indonesian Rupiah (IDR) for tether (USDT), which can then be traded on the local exchange. Huobi Cloud, a collection of approximately five international partners, will provide liquidity for the gateway.
“The new fiat gateway is part of Huobi’s global expansion strategy and reflects our ongoing commitment to working with strong local partners in key markets across the globe,” said David Chen, senior director of Huobi Cloud, in a statement.
The firm hopes to add fiat-to-crypto gateways in Turkey and Russia in early 2020.
Huobi’s corporate structure reflects its bid for global expansion. Huobi Group is the parent company over a number of entities, including Huobi University, Huobi Research and Huobi Global – the actual cryptocurrency exchange, with approximately 130 international branches.
Based in Singapore, Huobi spreads internationally by operating exchanges directly by acquiring companies or applying for licenses. The firm also enters into partnerships with local affiliates, such as in Indonesia.
Huobi Japan, a part of Huobi Group, announced a $4.6 million in new funding yesterday, by issuing stock to the Tokai Tokyo Financial Holdings (TTFH) through private placement.
Huobi Adds Crypto ‘Circuit Breaker’ After Last Week’s Mass Liquidations
The Singapore-based firm said Wednesday the new mechanism, integrated into its crypto derivatives marketplace, would halt all liquidations – where a trader’s position is automatically closed – during periods when volatility starts to present a real risk for traders.
Huobi’s new feature comes a week after several crypto derivatives exchanges reported record liquidations following a sudden collapse in the bitcoin price. BitMEX registered more than $700 million in just 15 minutes last Thursday as bitcoin (BTC) plummeted through its support levels.
Such sudden and large movements may catch traders by surprise leading to a sudden rise in volatility levels. Ciara Sun, Huobi’s vice president of global business, said market volatility can “lead to unnecessarily high-risk circumstances if the right measures aren’t in place to protect them.”
Liquidation mechanisms, like the one launched by Huobi’s derivatives platform Huobi DM, are commonplace in traditional markets where they are used to temporarily halt trading. Known as circuit breakers, they are often activated to stop panic selling when markets come under sudden and extreme duress.
The New York Stock Exchange, for example, has activated circuit breakers in the immediate aftermath of 9/11 and during the 2008 financial crisis. Stock exchanges all around the world, including NYSE, have recently been forced to trigger them again as the coronavirus pandemic sparked a global sell-off in equities.
Huobi’s liquidation mechanism also includes a new facility to gradually liquidate positions, rather than in a single event. Not found outside of the digital asset sphere, the only other exchange that uses a similar sliding liquidation mechanism is rival crypto derivatives platform, Bybit.
In the past, crypto volatility levels have spiked following short or long squeezes – mass liquidations from unexpected changes in the underlying assets that exacerbate movements. Sun added that a partial liquidation mechanism could create a more “robust trading experience,” minimizing downside “without diluting the potential upside.”