$300M in Bitcoin Flow to Binance From Huobi as China Gets Tougher on Exchanges

Nov 13, 2020 at 11:00 a.m. UTC.As the Chinese government cracks down on several crypto exchanges catering to traders based in China, many of those customers - and their bitcoin - have been making their way to Binance over the past few days.

Bitcoin flows to Binance from Huobi reached an all-time high since the Huobi chief operating officer, Robin Zhu, allegedly went missing on Nov. 2.

A spokesperson from Binance declined to comment on any impact China's crackdown could have on its business.

Over at rival exchange OKEx, with deep ties to China, all withdrawal services remain suspended after it said a holder of a private key needed to authorize withdrawals was out of touch while cooperating with public security investigators in China.

On Nov. 9, the person running TokenBetter, another crypto exchange with mostly Chinese users, was reportedly "Under investigation." TokenBetter's platform banned its withdrawal service on Oct. 16.This is not the first attempt by the regulators in China to crack down on crypto exchanges.

Bitcoin exchanges received orders to close their businesses in China after the country banned crypto trading activities in 2017.Huobi is now based in Seychelles, while OKEx is in Malta.

Multiple sources close to OKEx and Huobi told CoinDesk the new crackdown is associated with China's efforts to fight money laundering and fraud, and it is unlikely to have any connection with China's rollout of its central bank digital currency, the digital yuan.

Perhaps the most well known case was Ant Group's initial public offering, which was suspended on both the Shanghai and Hong Kong stock exchanges after the company's founder, Jack Ma, criticized China's regulators in a speech on Oct. 24.

A possible, positive, long-term outcome of the crackdown for exchanges could be that it may encourage the regulators in China to eventually push some sort of a compliance process for crypto exchanges instead of banning them, according to Hao Wang, founder and chief executive officer of Hong Kong-based crypto brokerage CyberX."Most of these lost users from Huobi will eventually flow to the white-label exchanges because most traders [in Asia] do not currently have access to trading platforms with regulatory compliance," Wang told CoinDesk in a WeChat message.

"The sentiment is very bad for all countries outside of China looking to do business with China at this time," Wang said.