Bitcoin Trading Platform Huobi Global to Cease Registration of New China-Based Users

Huobi Global, one of the major cryptocurrency exchanges catering to Chinese mainland customers, announced that as required by the regulatory policies issued by the Chinese government, it has decided to discontinue account registration for new users in Chinese mainland since September 24, and will gradually retire existing user accounts in the region by 24:00 (UTC+8) on December 31. The actions are carried out on the premise of ensuring the safety of users’ assets.

The People’s Bank of China (PBoC) and other domestic authorities recently issued a document that clearly identified virtual currency-related business activities as illegal financial practices. Also, if foreign virtual currency exchanges provide services to Chinese residents through the internet, they also represent illegal financial activities. The regulatory authorities are tightening the monitoring and early warning of speculation risks in virtual currency transactions. Financial institutions and non-bank payment institutions are banned from offering services for virtual-currency-related business activities.

As part of the nation’s efforts to save energy and cut carbon emissions, China’s Development and Reform Commission and other authorities on September 24 issued a notice on stepping up its crackdown on virtual currency mining. According to the notice, virtual currency mining refers to the process of calculating and producing virtual currency through special “mining machines,”. Virtual currency mining is energy-intensive, produces high carbon emissions and contributes little to the economy, authorities contend, adding that the industry’s ability to drive industrial development and scientific and technological progress is limited. Furthermore, the risks derived from the production and trading of virtual currency are becoming more and more prominent, and its blind and disorderly development has adverse effects on high-quality economic and social development and energy conservation and emissions reduction.

Therefore, the regulatory authorities required in their notice that power generation companies are not allowed to provide electricity to virtual currency miners, and virtual currency mining projects in the electricity market must withdraw within a time limit. Officials aim to seriously investigate and rectify illegal virtual currency mining activities in various places. The country will intensify regulation over the whole process of virtual currency mining and strictly prohibit new mining projects.

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The PBoC previously released the China Financial Stability Report (2021) on September 8, saying that it would strengthen the supervision of platform enterprises’ financial activities, as well as crack down on Bitcoin mining and trading behaviors.

Binance and Huobi Global run the world’s largest and second-largest cryptocurrency exchange by volume, respectively. They both adjusted their business operations to meet the requirements by the Chinese government after the regulatory authorities issued the notice.