Huobi announced that it will be closing the doors of its Australian office on 26th February 2019. All trading operations will be moved to its Singapore headquarters. The company cites that the reason for this closure is due to “poor market conditions and associated recent staff redundancies.”
The tenth cryptocurrency exchange by reported volume, Huobi, opened its subsidiary in Australia 8 months ago.
The prolonged bear trend of the crypto market has obviously affected the expected performance of the Australian branch. While the trading will continue, platform management, social media channels, and customer support will be migrated to the Singapore head office.
The first sign that things were not going so smooth became visible around a month ago. Huobi began making a staff reduction of 100 people from its total number of 1400 employees, stating that:
” We do not know how long the bear market will last, so […] We have to plan in advance and spend money carefully.”
At the time, this appeared as a calculated move for future plans, as CEO Livio Weng Xiaoqi, admitted that positive revenues were produced each month.
But, Huobi made significant investments in industry development and promotion last year. Getting rid of unprofitable departments could not be avoided, and perhaps the Australian office was unlucky enough to be included in the cutting down process.
This also led the Huobi Australia division to decide ‘not to explore adding a fiat on-ramp,’ opting to offer only crypto-to-crypto trading options. This means that no AUSTRAC registration would be required. The Australian Transaction Reports And Analysis Centre is a government entity in charge of financial intelligence whose role is to track and fight money laundering, organized crime, tax evasion, welfare fraud, and terrorism.
Closing the Australian office might have had something to do with this registration.
Whilst there is no evidence tying Huobi to financial illicit activities, Blockchain Transparency Institute reports allegedly point out to a widespread wash-trading. Huobi was actually ranked third on the Institute’s Exchange Advisory List, having approximately 86.91% of its volume via API trading.