The company stated that the migration has commenced after approval from Gibraltar Financial Services Commission (GFSC). Moving forward, spot trading will take place through the local entity, Huobi Gibraltar, which is distributed ledger technology (DLT) license compliant.
The licensing framework was first introduced in 2018 “for storing or transmitting value belonging to others”. Under Financial Services Act 2019, Huobi’s entity will be authorized to use DLT for the ‘operation of a secondary market venue for trading virtual assets; and the provision of broker/dealer services.’
Global expansion underway
Huobi Group co-founder Du Jun noted,
“This marks a key milestone in Huobi’s global expansion efforts. The global cryptocurrency industry is moving towards compliant growth and we recognize the need to align our business with this trend.”
Apart from the DLT license, Huobi has obtained a money lending license and charity registration in Gibraltar. Globally, it holds trust company license in Nevada, United States among other licenses in Hong Kong and Japan.
However, it is noteworthy that the Chinese company is incorporated in Seychelles and is listed in Hong Kong.
The company’s efforts for global expansion accelerated following China’s policy decision to ban Bitcoin and related operations. Huobi was one of the largest crypto businesses in the country. However, reports note that China’s stringent stance erased around 30% of the company’s revenue.
Back in September, Huobi founders had decided to move its operation out of China after the government crackdown.
Du Jun had explained in an interview with the Financial Times,
“Between late September to December 31, we are in the process of stopping servicing all our Chinese users. There will be no Chinese users on the platform . . . so our revenues from [these clients] are going to go to zero.”
With the migration, Huobi is expected to expand its offerings to retail and institutional investors globally. This is the first time, that the operations will go through “a fully regulated” entity.