Binance and Huobi in New Initiatives to Penetrate China

Binance and Huobi in New Initiatives to Penetrate China

Two of the world’s largest cryptocurrency exchanges have announced significant moves this week designed to increase engagement with China.

Binance has purchased San-Francisco-based over-the-counter (OTC) exchange Koi Trading while Huobi has established formal ties with China’s ruling Communist Party.

Global Liquidity and Political Alliances

Binance paid around $3 million for Koi Trading through its investment arm Binance Labs as it sets out to create a globally compliant platform providing liquidity for private trades away from the main exchange.

Koi’s CEO Hao Chen states that his company enjoys a “…robust AML program [and] extensive banking relations in the US,” which will specifically create “…strong trust amongst counter-parties in Greater China [which will] be the market nexus that reduces trust and information asymmetry and improves cryptocurrency OTC deal close rate.”

Meanwhile, according to a report in the South China Morning Post, the Huobi Group has organised its own Communist Party committee which is a first for any blockchain company in China.

Legally, any enterprise in China that has at least three party members as employees can create its own party branch that is tasked with promoting the official party line. Traditionally, this has been a domain for state-owned companies but more recently private companies, such as Baidu and Alibaba, have taken up the option as they look to establish stronger governmental ties.

Last year’s clampdown on exchanges by the Chinese government resulted in Huobi relocating its trading arm to Singapore but its mining pools and venture funding arm still remain within mainland China.