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

China’s recent crackdown on crypto miners and traders in the country has sent shock waves all across the crypto market. On Sunday, May 23, the crypto market entered a severe correction crashing another 14% as Chinese exchanges started curtailing their services to local Chinese investors.

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

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

The prices of the Hong Kong listed companies of OKEx and Huobi fell by 14.9% and 20.1%, showing the panic of stock investors before the Chinese government's next policy. Huobi has already applied for multiple crypto funds. But their listed companies do not include exchanges. pic.twitter.com/kaChXMgLn4

— Wu Blockchain (@WuBlockchain) May 24, 2021

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

As we know, China alone accounts for over 65% of the global mining operations. The Chinese miners hold large amounts of Bitcoin and Ethereum. Thus, the impact on their price is pretty obvious. On the other hand, Chinese investors were active participants in the crypto space contributing around 60% of the trading volume for perpetual contracts. Wu Blockchain points out that coins with heavy Chinese investments felt the most over the last week.

Most of the coins with the largest decline in 7days are cryptocurrencies initiated by or mainly invested by Chinese people. pic.twitter.com/DAOh7baowx

— Wu Blockchain (@WuBlockchain) May 24, 2021

Hong Kong Restricts Crypto Exchange Use to Professional Investors

A recent report from Reuters noted that crypto exchanges operating out of Hong Kong need to get licensed through the local regulators and shall be able to offer services only to professional investors. However, Chinese journalist Wu Blockchain notes that it is nothing new as HK has always required 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 shall be keenly observed going further, especially by some of the biggest institutional players who have been dabbling into Bitcoin (BTC) over the last few years.

The post Stocks of Hong-Kong-Listed Companies of Huobi and OKEX Crash After Suspending Crypto Services appeared first on Coingape.

Publication date

05/24/2021 - 05:59

Author

Bhushan Akolkar

Article source

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