June 24, 2021

Stocks of Hong-Kong-Listed Companies of Huobi and OKEX Crash After Suspending Crypto Services

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China’s recent crackdown on crypto miners and traders in the country has sent out shock waves all across the crypto market. On Sunday, May 23, the crypto market went into an extreme correction crashing another 14% as Chinese exchanges began reducing their services to regional Chinese financiers.

Soon after Huobi and OKEx announced restricting their services, stocks of Hong Kong-listed companies of these begun fixing majorly. It is clear that China’s cryptocurrency regulatory crackdown has far-reaching repercussions even outside the crypto market.

Earlier today, stocks of OKEx and Huobi crashed 15% and 20% respectively as worry gripped investors ahead of China’s next crypto policy.

This comes as crypto exchange Huobi confirmed to Reuters that it is preparing to suspend its services in Mainland China. Rather it will now focus its services on overseas markets. Not only exchange however crypto mining businesses based out of China are also making a comparable relocation. As CoinGape reported, most of the Chinese crypto miners are moving their rigs to Europe and North America.

As we understand, China alone accounts for over 65% of the international mining operations. The Chinese miners hold big amounts of Bitcoin and Ethereum. Therefore, the effect on their price is quite obvious. On the other hand, Chinese investors were active participants in the crypto area contributing around 60% of the trading volume for perpetual agreements. Wu Blockchain points out that coins with heavy Chinese investments felt the most over the last week.

Hong Kong Restricts Crypto Exchange Use to Professional Investors

A recent report from Reuters kept in mind that crypto exchanges running out of Hong Kong require to get certified through the regional regulators and will be able to provide services only to professional financiers. Nevertheless, Chinese reporter Wu Blockchain keeps in mind that it is nothing brand-new as HK has always needed exchanges to have licenses. He further adds:

“Beijing’s crackdown on cryptocurrencies in mainland China does not include Hong Kong. Similarly, Hong Kong’s cryptocurrency policy has nothing to do with mainland China”.

china’s crypto policy will be keenly observed going even more, especially by a few of the most significant institutional gamers who have been messing around into Bitcoin (BTC) over the last few years.

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