Huobi set to return to the US but is unlikely
- Huobi Tech co-founder Du Jun confirmed in an interview that the exchange is mulling a return into the US
- The exchange is, however, seeking to re-enter the market in the lines of asset management as opposed to an exchange
Crypto exchange Huobi has plans to enter the US market, targeting a different sub-niche. Speaking in an interview with CNBC’s Arjun Kharpal, Huobi co-founder Du Jun expressed the company’s desire to expand into the US. Jun explained that Huobi was ready to get back into the competitive US market after redefining its strategy.
The Huobi brand operated in the US market for a short while between 2018 and 2019 through– a US-based entity called Huobi US. The entity failed to stick the landing and consequently withdrew from the market in December 2019, citing regulatory challenges.
Huobi has now settled on a different strategy
Explaining the failure to conquer the market in the previous attempt, Jun pointed out the lack of a strong commitment to the endeavour and a good management team. This time, however, Huobi is banking on asset management as a better opportunity than an exchange.
“Cryptocurrency is a large industry, and an exchange is only one part of this industry which was exposed the most. From mining machines […] to wallets, including financial derivatives, there are many possibilities. I expect asset management to be a bigger business than exchange which echoes the traditional financial market. In choosing our business model to enter the US, I don’t think exchange is a necessary element,” Jun said.
Indeed, as an exchange, Huobi will face stiff competition from bigger rivals like Binance.US, Coinbase, Gemini, and FTX.US. In addition, it will have to keep up with the evolving regulatory landscape. Taking these factors into account, Jun’s argument strikes as logical.
Huobi appears committed to making the expansion successful. According to the co-founder, the exchange firm will not spare any resources in the venture.
“As for how much resources or staff we will deploy in the international market, we have no other choice but using our full strength to go forward in our global strategy. In the past, we would explore a new market and we could always withdraw ourselves if it didn’t work out. Now Huobi has no other choice but to go global,” he added.
Huobi’s journey over the years
Though the company was founded in China, it has its headquarters in Seychelles. It has also set up regional shops in other locations, including Singapore.
Notably, Huobi was among the exchanges that suffered a blow due to China’s clampdown on digital assets. The company’s exit from the Chinese market reportedly cost it almost a third of its revenue stream.
This is not the first talk in the lines of Huobi seeking to re-enter the US market. It has on several occasions teased a move into the US market but hasn’t been as keen to revive its operations across the US fully.