After the Chinese government’s ban of initial coin offerings (ICOs) in the country, the government went further and successfully banned all local cryptocurrency exchanges. At the time this was a huge blow to the crypto economy, as China was the largest market for Bitcoin traders.
Now the newly nomadic Chinese cryptocurrency exchanges are in search of a new home in Asia. Today, Huobi, which was China’s largest cryptocurrency exchange, announced a strategic partnership with Japan’s SBI group, revealing that they will set up two new cryptocurrency exchanges in Japan in early 2018. SBI is the current Bitcoin market leader by trade volume.
According to the official statement released by SBI group, the partnership includes an equity swap between the firms. As per the agreement, SBI group will acquire a 30 percent stake in the Huobi Japanese equity and 10 percent in Huobi’s South Korean entity, while Huobi will buy a 30 percent stake in SBI Virtual Currency, a Tokyo-based subsidiary of SBI group providing cryptocurrency exchange services.
SBI is one of the largest financial groups in Japan, and as a venture capitalist, it also pours money into various blockchain players across the world. The group plans to dominate the blockchain industry by establishing a “new financial ecosystem based on cryptocurrency.” SBI Virtual Currency is also one of the first 11 companies to obtain a cryptocurrency dealer license from the Japanese Financial Services Agency (JFSA).
Huobi was the largest cryptocurrency trading exchange in China before the crackdown. The exchange handled a trading volume of over 30 billion yuan ($4.5 billion) at its peak and had 1.65 million registered users. After its exit from the Chinese market, Huobi focused on growing in the other crypto-friendly Asian markets like Singapore, Hong Kong, and South Korea. The firm is also concentrating on its Singapore-based cryptocurrency trading platform huobi.pro and operates another peer-to-peer crypto trading platform in Hong Kong.
Meanwhile, the group is not the only ex-Chinese crypto exchange looking for a new home. Another leading Chinese exchange OKCoin is also in talks with Japanese and South Korean local companies to establish new exchanges there.
As quoted by Quartz, Du Jun, co-founder of Huobi and founder of Node Captial, a Beijing-based VC firm, said: “It’s just a beginning…A good industry won’t collapse because of crackdowns by a single country, and I don’t think a good entrepreneur will lose his strength because of one country’s restrictions.”
He added: “Six billion people are always better than 1.3 billion people.”