Huobi CEO Leon Li: We're Trying to Create Offshore Account

Major exchanges in China are actively seeking avenues outside the country in a bid to escape the Peoples Bank of China's (PBOC) tightening grip on Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term.

Huobi CEO Leon Li told the South China Morning Post:

“We have two paths of action [to protect] our platform..."We are trying to create an offshore account and to go international. We don’t want to touch the customer’s money in China, because maybe [Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term] is going to get worse.”

Last month, Huobi and several other exchanges were informed by their partner banks of the discontinuation of their services. By the same token, banks stopped processing transactions made by customers to Bitcoin exchanges.

Bobby Lee, CEO of BTC China, said his exchange is increasingly relying on paper vouchers to avoid transacting through the banks. He believes that the recent crackdown has severely lessened the appeal of Bitcoin in China, saying, "Newcomers who have heard about bitcoin who were planning to come and buy bitcoin out of curiosity, as an investment or for novelty’s sake are now thinking twice.”

More Cat & Mouse?

Even if Huobi et al are successful in going offshore, there's no guarantee Chinese Bitcoiners will be able to get their money there. Currently, Chinese sending money out of the country are limited to $50,000 worth annually. This, theoretically, should not pose a problem for most Bitcoiners.

It has been debated though how far the PBOC is willing to go to tame Bitcoin. It seems unlikely that they'll revamp their capital control policies just to target what constitutes but a minuscule fraction of capital that would flow out of the country. There is nothing stopping them, however, from imposing directives targeted specifically toward those looking to deal in Bitcoin via offshore banks. Such directives, fulfilled via local banks, would be the next step in the game of cat and mouse between the PBOC and Bitcoin.

Alternatively, we can't rule out the potential role of UnionPay. It has become a popular tool for funneling yuan out of China, particularly in Macau where fake transactions, sometimes on the scale of millions of yuan, are carried out with merchants to secure yuan cash for gambling. One wonders how far exchanges will go in a world where they're conducting business offshore.