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Huobi to Freeze All US Accounts and Push Users to New Platform

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Huobi

Huobi

Huobi, the popular Singapore-based crypto exchange, has announced that it will freeze all US accounts by November 13 due to the particularly stringent regulatory environment that has forced the exchange to prohibit US users.

Huobi Pushes Users to New Independent Platform

In a blog post from the exchange published over the weekend, Huobi has said that its user agreement expressly prohibits US-based crypto traders from using the platform in line with the laws and regulations of the US. The accounts of those users have been gradually disabled in order to prevent any further trading, and traders have been advised to return their borrowed funds in margin trading and withdraw all assets balance. Customers can receive their funds in Bitcoin or USDT, and Huobi also pledged to refund points card purchases at a 1:1 ratio in USDT.

However, this does not mean the end of Huobi in the US. The exchange has advised its users to begin using its “exclusive U.S. strategic partner,” the San Francisco-based HBUS, a platform dedicated to serving US-based customers. HBUS functions in a similar manner to Binance.US, which launched in September, in that it essentially provides the same service as its parent company but operates independently of it, and is authorized for use in the US.

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Huobi Token Jeopardised

The closing down of its US accounts could throw Huobi’s native digital asset, the Huobi Token (HT), into jeopardy. As Huobi deprives US citizens of using its platform, it is also preventing them from investing in its coin. Closing such a vast market could affect the value of its cryptocurrency. HT was originally intended to be a stablecoin, backed 1:1 with the US dollar. However, the exchange now says that the coin will be an ERC-20 token, meaning it is built on the Ethereum blockchain.

In order to regulate the supply of HT, Huobi has “burned” over 14 million tokens, bringing the total supply to 310,318,300.

Featured Image: DepositPhotos © yana-komisarenko@yandex.ru

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Huobi US to Cease Operations After Underwhelming Year

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Huobi

Huobi

HBUS, the US-focused partner exchange of Huobi, will cease operations on December 15 after less than 18 months in business amidst strong competition among crypto exchanges in the US.

HBUS has said it is no longer accepting deposits and while all other services will cease on December 15, customers have until January 31 to withdraw their remaining assets. The announcement comes just a month after Huobi announced that it will freeze all US accounts on its main Singapore-based exchange and push them to HBUS in order to be regulatory compliant.

A blog post from Huobi over the weekend read as follows: “Dear Customer, we regret to inform you that HBUS will need to cease operations so that it can return in a more integrated and impactful fashion as part of its ongoing strategic layout.” The exchange had been rattled in recent weeks by a number of key departures, including Oren Blonstein, who took over the CEO position in September but left the company in December. The previous CEO was Frank Fu, who is now a managing director at Fenbushi Capital.

The most significant factor in Huobi’s US departure was the increased competition in the area of crypto exchanges. With Binance.US making forward strides and the recent launch of Bakkt bringing in more institutional investors to the world of crypto, Huobi had struggled to generate any serious trading volume. Current volumes have dropped to around $220,000 USD per day, a rock-bottom level more suited to a small-scale exchange. HBUS trading for altcoins had dropped to almost non-existent levels, and it did not even have a significant Bitcoin (BTC) market.

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The decision by Huobi to end US operations could be good news for the likes of Binance.US and Bakkt. Binance’s American arm only launched in September but already carries nearly $3 million USD in volumes while Bakkt has just rolled out its cash-settled futures and is picking up in volume after a slow start to life.

Featured Image: DepositPhotos © yana-komisarenko@yandex.ru

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