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CNBC Du Jun interview: Huobi will return to the US market due to the loss of 30% of revenue due to withdrawal from the Chinese mainland market

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Du Jun said that China's crackdown on encryption has protected a relatively small number of investors.

Original title: "Chinese cryptocurrency exchange Huobi plans to re-enter U.S. market, but with asset management focus"

Original author: Arjun Kharpal, CNBC

Original compilation: chain catcher

Core information:

1. Du Jun said , Huobi lost about 30% of its revenue due to its withdrawal from the mainland China market.

2. Huobi will return The U.S. market focuses on asset management and other businesses rather than trading platforms.

3. In addition to returning to the U.S. market, Huobi is still exploring setting up headquarters in Europe.

4. Du Jun praised China's strict regulatory policy on cryptocurrencies because "it protects a small number of investors."

Huobi co-founder Du Jun told CNBC that cryptocurrency trading platform Huobi plans to re-enter the U.S. market after more than two years of ceasing operations to comply with regulations.

But Du Jun said that after the last misstep, Huobi may not launch a trading platform and instead focus on other areas such as asset management.

“In 2018, we tried to enter the U.S. market, but we quickly withdrew because we didn’t have a strong commitment to the market at the time, and we didn’t do well in the U.S. management team." Du Jun said.

“I expect asset management to become a bigger business than trading platforms, which echoes traditional financial markets, Du Jun told CNBC that he does not think the trading platform is a necessary factor to enter the US market.

Du did not disclose which businesses Huobi will launch first after returning to the US market. A return to the U.S. market could put Huobi in competition with the likes of Coinbase. According to CoinGecko, Huobi is one of the top 10 cryptocurrency exchanges in the world by volume.

As early as 2018, Huobi launched the cryptocurrency trading business in the United States for the first time. The following year, the company said it would freeze U.S. user accounts, saying it would return to the market in a "more integrated and influential way" in the future.

At present, in addition to the trading platform business, Huobi Group also has asset management business, which is operated by Huobi Technology. Huobi Technology is a listed company in Hong Kong.

Huobi's decision to return to the U.S. market is part of a larger international expansion plan. Last year, the Chinese government introduced policies to outright ban cryptocurrency mining and crack down on regulatory loopholes that allow mainland users to transact.

Huobi has opted out of the mainland China market. By the end of 2021, it will close all existing user accounts in mainland China and choose Singapore as its Asian headquarters.

Du Jun said that Huobi lost about 30% of its revenue due to its withdrawal from the mainland China market.

But this provides further impetus for the company's international expansion. In addition to returning to the U.S. market, it is also exploring a European headquarters.

“As for how many resources or people we will deploy in the international market, we have no choice but to go all out and advance our global strategy,” Du Jun explain. "In the past, we would open up a new market and if it didn't work, we could always exit. Now, Huobi has no choice but to go out."

Praise the mainland's encryption regulatory policy, other regions should not follow

Du Jun praised China's strict regulation of cryptocurrencies as it has cracked down on gambling and money laundering cases. Du Jun said that China's crackdown on encryption has protected a relatively small number of investors. But he also said that other countries may not follow suit, as investors in other markets may be more sophisticated.

“In other regions, we can find that investors there are more sophisticated. Governments in these markets do not need to take some strict measures.”

Currently, global regulators are considering regulatory rules for cryptocurrencies, including trading, taxation, etc. This month, India proposed a 30% tax on any income from the transfer of digital assets. Meanwhile, the U.S. is still figuring out how to regulate cryptocurrencies.