According to a report, close to $300 million equivalent to 18,652 BTC has been moved from Huobi to Binance from the time the Chief Operating Officer of Huobi Robin Zhu disappeared on November 2, 2020, to November 11, 2020.
Binance has become the next destination of the huge migration of users from the Huobi exchange and other China-based cryptocurrency exchanges following the recent severe crackdowns staged by the Chinese government. According to a report, there has been a record amount of $300 million inflow from Huobi to Binance as Chinese traders and investors look for alternatives.
The crackdowns on exchanges in China have been around for some time with the recent operation being linked to the Central Bank Digital Currency yet to be launched. However, others suspect that the use of cryptocurrencies for fraud and money laundering is the primary reason for this operation.
According to a report, close to $300 million equivalent to 18,652 BTC has been moved from Huobi Exchange to Binance Exchange from the time the Chief Operating Officer of Huobi Exchange, Robin Zhu disappeared on November 2, 2020, to November 11, 2020.
TokenBetter on the other hand also suspended all withdrawals in mid-October with the founder said to be under investigation. OKEx, another exchange with deep ties in China has also been said to be under investigation causing withdrawal to be unavailable. This has severely affected their native tokens as well with that of OKEx Exchange (OKB) losing close to 30% of its price while the native currency of Huobi Exchange (HT) struggles to add gains.
The Spokesperson of the Binance Exchange refused to comment on the effect of the ongoing crackdowns on their exchange. However, a man Identified as Colin Wu, who happens to be a Cryptocurrency Reporter suggested that the migration of Chinese users from Huobi to Binance is because the Chinese are already familiar with Binance and also, Binance executives are based abroad.
An attempt to uncover the whereabouts of Robin Zhu was infertile as the company refused to give out information, but a brief conversation with Ciara Sun, the Huobi Exchange’s Global Market’s Vice President stated that all operations are normal. She said the information going around is false, and they reserve the right to take people on for spreading false news.
Reason and Effect of This Crackdown on Huobi Exchange and Others
Felix Wang, managing director at Hedgeye revealed to reporters that the Chinese government is only interested in cracking down on products that are misleading to the public. He said that the government, who has been a big fan of innovation and development, does not want digital products to disrupt what is already circulating in the financial system.
Wang analyzed the long term effect of these persistent crackdowns on the cryptocurrency sector stating that this movement will strongly affect investors abroad who seek to do business related to cryptocurrency in China. He also pointed out that fintech and blockchain-related companies may feel this is the beginning of crackdowns on them forcing companies to seek expansion overseas. Due to the fact that Chinese based cryptocurrency traders may struggle to find a platform that is regulatory compliance, they may troop into the foreign-based exchanges.
Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.