Currency Economy

Huobi Global Not Licensed by Seychelles

Cryptocurrency (Mar 09, 2021 08:00AM ET) Huobi Global Not Licensed by Seychelles

Huobi Global Not Licensed by Seychelles

  • Huobi Global Ltd is operating without a license in Seychelles.
  • Malta’s financial regulator reported Binance for the unauthorized operations in February.

Huobi Global, one of the largest cryptocurrency exchanges in Asia, operates without a license, alerted the Financial Services Authority of Seychelles (FSA).

FSA is the local regulatory body responsible for licensing, regulating, and supervising the non-bank financial services in Seychelles. As it reported on Monday, Huobi Global Ltd that “appears to be affiliated with the online trading platform for virtual assets called Huobi Global”:

[…] does not hold any licence issued by the FSA to undertake such type of activity. Therefore, the entity is not being regulated by the FSA nor has it been in the past.

No comments from Huobi

Huobi Global is the world’s second-largest cryptocurrency trading platform with over $1 billion daily trade volume. Founded in 2013 by Chinese Leon Li, a former computer engineer at Oracle (NYSE:ORCL), Huobi Global operates with a headquarter based in Seychelles.

After China’s crackdown on cryptocurrency in November 2017, Chinese exchanges were forced to move their operations elsewhere or shut down completely.

Huobi Global is one of the largest cryptocurrency exchanges founded in China and serving more than 5 million users in over 130 countries. Following 2017 China’s official ban on cryptocurrency exchanges, it moved headquarters to Seychelles.

The company has not commented on the FSA alert since. However, Huobi Global Ltd., the operator of digital asset trading platform Huobi Global, is registered in the Republic of Seychelles and shall be governed by the local law, states the official website.

The status of Seychelles

The Republic of Seychelles is the archipelago of islands in the Indian Ocean and one of the most popular jurisdictions for offshore businesses. The country gained the status of tax haven for its

zero taxation on capital gains.

Seychelles have recently introduced several legislative and regulatory changes to support its offshore services sector. However, as legal content aggregator Mondaq reports, the jurisdiction has not applied any specific restrictions on international business companies (IBC) operating the cryptocurrency exchanges.

On the Flipside

  • In the last months of 2020, crypto space buzzed with rumors of one of Huobi Global Ltd. executives’ arrest related to Huobi’s over-the-counter (OTC) trading services.
  • Hong Kong’s Securities and Futures Commission (SFC) licensed Huobi’s subsidiary last week to manage virtual asset investment portfolios.

Binance unlicensed in Malta

Huobi Global is not the only crypto exchange facing the issues of regulatory supervision. This year, another major Chinese cryptocurrency trading platform Binance was reported to operate without a license in Malta.

On February 21, Malta’s Financial Services Authority (MFSA) published a statement claiming that Binance has never received authorization to operate in the country. Binance has been introduced as a “Malta-based cryptocurrency” company, the regulatory said. However, the exchange was not officially allowed to operate cryptocurrencies and, accordingly, was not regulated in the European country.

In 2018 Binance said to be opening an office in Malta, soon after Japan’s regulators warned it over operating without a license. Since then, Binance often mentioned Malta as one of its bases, according to Asia Times.

The regional director at Binance, Josh Goodbody, addresses the fact the decentralization: “as we run such a decentralized operation, there isn’t a clear answer for that – where we operate regulated businesses, we have teams based there.”

Continue reading on DailyCoinHuobi Global Not Licensed by Seychelles

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