Regulatory Pressure on Crypto Exchange Huobi Triggers a 64% Decline in Revenue
In the face of increased regulatory pressure and the capitulating crypto market, Huobi has lost a considerable percentage in revenue. The cryptocurrency exchange which holds an enviable position amongst the top 10 exchanges has been a frequent victim of constricting regulations from China and other governments around the world.
Colin Wu, a popular crypto news journalist reported the misfortune of the crypto exchange on Twitter. According to the tweet, the platform has lost up to 64% in revenue due to the strict crackdown China placed on crypto-related activity.
The tweet from the blockchain enthusiast read thus – “Under regulatory pressure, China’s largest exchange Huobi’s revenue in June fell by 64%, and USDT reserves fell by 500 million from April.”
Furthermore, a second tweet revealed that in June 2021, the trading platform burned 3,797 million units of its native Huobi Token (HT). The amount reels up to $48.601 million and is equivalent to a 64.93% decrease from May. “Huobi uses 20% of its contract platform and Huobi Global’s revenue to purchase and destroy HT tokens”, the tweet further stated.
Huobi’s Regulatory Turmoils
Just like a myriad of other cryptocurrency exchanges, Huobi has been roughly hit by regulatory policies from financial watchdogs. The Chinese-born firm had exited the Asian country due to regulatory restrictions to settle in Seychelles. However, the host country as well isn’t at ease with the exchange’s operations and has warned investors against them.
In June, Huobi revealed 10 locations it would restrict from carrying out derivatives trading on its platform. The exchange marked out people from Mainland China, the UK, Iraq, Bangladesh, Israel, Taiwan, and a host of others from leveraging the derivatives trading desk.
Regulatory limitations on crypto exchanges are not peculiar to Huobi alone, other exchanges like Binance and Coinbase have all been affected by this wave of limitations. Binance above all appears to be the worst hit after its operations were flagged down repeatedly. The Financial Conduct Authority (FCA) as well as other regulatory bodies have called out the firm over perceived regulatory defaults and unregistered operations. Thereby resulting in its activities being clamped down in locations like the UK and even Ontario.
Bitcoin Suffers From Aftereffects of Regulatory Issues
Owing to regulatory issues, the value of Bitcoin has toppled. The asset which stands out in the cryptocurrency market as the leading crypto asset could not withstand the regulatory winds.
From the middle of May, the asset flung down heavily and settled at nearly half its value in barely two weeks. The reason for this is attributed to the uncertainty that emanated from China banning it and its suspension as a payment method by the automobile manufacturing company Tesla.
Subsequently, the Chinese government suspended Bitcoin mining which resulted in a decline in Bitcoin’s hashrate. BTC’s mining difficulty plummeted to a level that hasn’t been seen in years as miners deserted China for other accommodating locations. However, analysts hold high hopes for a Bitcoin comeback once miners settle in diverse locations.
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