Just days after the Chinese government vowed to crack down on Bitcoin mining and trading, cryptocurrency exchanges Huobi and OKEx have begun to block Chinese customers from accessing some of their services.
Huobi told Decrypt that it has temporarily ceased crypto derivatives trading for “customers in certain markets” to “protect the interests of investors,” citing “recent dynamic changes in the market.”
While the Huobi spokesperson did not mention that Huobi has ceased derivatives trading in China specifically, the country is the only one where traders have reported restrictions.
The spokesperson added that Huobi Pool, the company’s mining pool service, has prevented Chinese customers from buying and storing miners. It said the limitations are “to focus on the expansion of our overseas presence.”
Chinese blockchain journalist Colin Wu said that Bitcoin miners will be removed from the shelves, but that Huobi’s mining pool service itself is unaffected.
Huobi Pool stated that it will stop providing services to Chinese users. Those who have already purchased Bitcoin mining machines will be removed from the shelves, a interesting thing is that Huobi said that FIL mining machines will not be affected. pic.twitter.com/B62PII7pmB
— Wu Blockchain (@WuBlockchain) May 23, 2021
A spokesperson from OKEx told Decrypt that it will temporarily delist its token, OKB, for Chinese users on its peer-to-peer platform, starting tomorrow at 2pm UTC+8. The spokesperson did not provide a specific reason but reminded Decrypt of OKEx’s commitment to regulatory compliance.
OKB has fallen by 67% in the past week, to $10.86. Huobi Token has also fallen by 63% in the past week, to $11.5.
Both exchanges left China after the government banned cryptocurrency exchanges in 2017. However, they maintain large Chinese customer bases and their parent companies still operate out of China.
Crypto’s China woes
The restrictions follow two key developments from China this week, both of which plunged the crypto market into freefall.
On May 17, three major payments associations in China—the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China—reconfirmed their commitment to regulation from 2017 that prevents financial institutions that deal with crypto. The associations also issued warnings against crypto speculation.
Following the news, which was widely misreported as a new ban on crypto, Bitcoin fell to lows of approximately $31,600. The damage was compounded when the Chinese government on May 21 said that it needed to crack down on Bitcoin mining and trading to “prevent and control financial risks.” That announcement crashed Bitcoin, which had since recovered to about $40,000, by a further 12%.
