Huobi Korea Shuts Down Operations Citing Business Difficulties

The ongoing crypto regulatory scrutiny in different global jurisdictions has pushed legacy exchanges into a tight spot in the recent past. With the leading cryptocurrency exchange by daily trading volume Binance Holdings Ltd, having retrieved its operations from several jurisdictions due to a lack of proper licensing, other exchanges are finding the environment harsh despite the notable demand for digital assets. In the latest updates, Huobi Korea announced on December 29 that it has closed its operations and customers need to withdraw their funds by January 29, 2024.

“In order to provide a better virtual asset exchange service, the company has restricted the use of some services and has been carrying out brand renewal and system upgrades. However, considering the current business environment, the company’s position is that it will inevitably terminate the virtual asset exchange service,” the announcement noted.

Meanwhile, the exchange indicated that customers’ funds are safe despite the sudden closure of the business and customers’ withdrawal will continue until the last full withdrawal takes place. Nonetheless, Huobi Korea noted that only withdrawals to overseas exchanges are supported during this period, thus indicating a hostile relationship with the local regulators. Moreover, withdrawals to local crypto wallets are not also supported, thereby leaving the customers in a tricky situation.

Notably, Huobi Korea is currently undertaking wallet maintenance, thus some crypto coins are not supported for withdrawal. In this regard, Huobi Korea announced that it will resume its withdrawals in a short period.

The cryptocurrency exchange was established in 2017 but remained in close ties with Huobi Global until January 2023. The transition follows a tight financial situation at Huobi Global that resulted in a 20 percent staff reduction.

South Korea Tightens Crypto Regulatory Standards

In a bid to foster a sustainable future for the cryptocurrency industry, the South Korean government has upheld high standards for crypto exchanges. Notably, the country is expected to enact the Virtual Asset Investor Protection Act later this year. Interestingly, crypto exchanges in South Korea are expected to retain close ties with local banks in order to issue real-name deposits, thus minimizing instances of money laundering. Consequently, several crypto exchanges and firms in South Korea have been forced out of business including Cashierest, Coinbit, and CoreDAX.

Meanwhile, top-rated crypto exchanges in South Korea including Upbit, Bithumb, Coinone, Korbit, and Gopax command more than 99 percent of the total trading volume.

Justin Sun Under Regulatory Radar

Since the takedown of former Binance CEO Changpeng Zhao, the United States, and its allies have undeniably turned on Justin Sun, a major investor in Huobi Global, Poloniex, and the Tron Foundation. Moreover, Tron products including the Tether USDT and TRX are not supported in the United States amid ongoing regulatory scrutiny.