China’s Huobi Group Moves Asia Base to Singapore
The operator of China's largest cryptocurrency exchange, Huobi Group, recently announced that it has chosen to move its regional headquarters to Singapore.
According to Du Jun, the group's co-founder, the move to Singapore was part of its efforts to shift its focus outside China. He also revealed that the group is considering setting up another regional headquarters in Europe, specifically in France or the United Kingdom, in 2023.
A Huobi Global representative said that the Singaporean headquarters would manage operations for the Southeast Asian region but did not say if it would manage other regions. However, Du Jun told Bloomberg that new headquarters would handle all of the operations in Asia.
"Southeast Asia is an attractive market where the number of trading users quadrupled over the past month," Du Jun said.
Huobi has moved most of its staff to Singapore since May 2021 after Chinese Vice Premier Liu He and the country's State Council called for tighter crypto regulation to protect China's financial system in May 2021.
The company has been operating in Singapore since 2017, with the establishment of its blockchain incubator Huobi Labs in the country. However, the group may have felt the need to break off from its home country due to Beijing's ban of all crypto transactions and services in September 2021. A BBC report mentioned that the Chinese government sees cryptocurrencies as "a volatile speculative investment at best - and a way to launder money at worst".
The company had also been managing digital currencies for Singaporeans in the past few years. However, it announced that it would no longer offer its services starting 31 March 2022 due to Singapore being classified as a restricted jurisdiction. According to the company, this classification was in compliance with the regulations of Singapore's financial authorities. However, Huobi revealed that the closing was "planned" so it could set up Huobi Singapore - a new, regulated entity that is expected to open before 2021 ends.
Even with the involved regulations, Singapore is still aspiring to become a major hub for cryptocurrencies. Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said that the best approach is "to not clamp down or ban [cryptocurrency-related businesses]".
"With crypto-based activities, it is basically an investment in a prospective future, the shape of which is not clear at this point. But not to get into this game, I think, risks Singapore being left behind. Getting early into that game means we can have a head start, and better understand its potential benefits as well as its risks," Menon said.
Menon added that Singapore is interested in developing and understanding crypto technology in preparation for "a Web 3.0 world".
Singapore's approach to cryptocurrencies has attracted crypto firms like Binance and Gemini, a U.S.-based cryptocurrency exchange company that targets institutional investors.
Currently, the brokerage arm of the Development Bank of Singapore, cryptocurrency payments provider TripleA and one other crypto firm out of 400 similar companies have received a MAS license. Menon said that the MAS carefully considers the companies' applications to meet the regulator's high requirements.
"We don't need 160 of them to set up shop here," Menon said. "Half of them can do so, but with very high standards, that I think is a better outcome.
Written by John Paul Joaquin