Cryptocurrency exchange, Huobi, has indicated that it could return to the U.S. market as early as this month, according to a company executive.
Global Crypto Exchange Huobi Could Reopen U.S. Trading this Month
An executive of the global cryptocurrency exchange, Huobi, revealed that they are planning to start offering trading services in the United States again. According to the company executive, they could begin as early as this month.
Ciara Sun, Huobi Group’s vice president of global business, recently stated in an interview that Huobi is set to open its doors to cryptocurrency activities in the U.S. once again. This comes barely five months after the company’s over-the-counter crypto trading brokerage in San Francisco, Huobi US (HBUS), instantly shut down operations. Back then, the company talked about unspecified regulatory roadblocks as the reason why they shut down their operations in the United States. While they indicated they would be back, Huobi didn’t give a timeframe back then.
However, it now seems that Huobi is ready to venture into the U.S. market again. Huobi is aiming to re-launch its services by partnering with a local licensed trading platform. This would make it easier for Huobi to comply with regulatory requirements at a lower cost.
Clara Sun stated that based on what they had learned from prior experience, the strategy for Huobi to re-enter the U.S. market will be to partner with a fully-regulated firm. She also stated that they would come back as Huobi Group and that they would no longer have a separate legal entity anymore, such as Huobi US.
Sun pointed out that Huobi has been negotiating with a local cryptocurrency brokerage. Their discussion centers on a strategic partnership that could see Huobi acquire a minority stake in the broker. However, Sun didn’t identify the brokerage firm they have been talking to for a while now.
Via the partnership, Huobi would find it easy to provide asset management services along with OTC brokerage services. However, both services would be exclusive to institutional investors in the U.S. Sun added that their services would extend to retail investors in the U.S. over time.
Will Huobi Succeed This Time Around?
Huobi has been one of the leading cryptocurrency exchanges that started operations in China. According to data provider Nomics, Huobi is currently the first crypto exchange by year-to-date volume. However, its transparency score of C doesn’t do Huobi much favor.
The U.S. entity of Huobi initially found it hard to breakthrough during its first stint in the country. Prior to its launch in 2018, Huobi US registered as a money services business (MSB) with the Financial Crimes Enforcement Network (FinCEN). It further sought to obtain a BitLicense from New York State, which happened to be too big for the company to handle.
After registering as an MSB, a cryptocurrency exchange is required to get money transmission licenses in all the states it wishes to operate in. Huobi US received licenses in 43 states across the U.S., but most of them only allowed the company to offer token-to-token trading, not token-to-fiat.
This presented challenges to Huobi, and in November last year, the company froze all U.S. accounts and eliminated local traders and investors out of its platform. According to Huobi, the move was made to comply with regulatory requirements in the United States.
Binance, one of Huobi’s major competitors, faced similar regulatory challenges in the U.S. Huobi’s announcement came less than a day after Binance revealed that it has partnered with California-based crypto firm, BAM Trading Services, to expand its business in the U.S. BAM Trading Services is already a registered MSB and would now be known as Binance U.S. However, the numbers are set to rise as Binance now controls the trading platform.