Huobi’s Australian arm sought registration with the Australian Transaction Reports and Analysis Centre (AUSTRAC) but has chosen to forgo its certification.
Market Slump and Redundancies
The decision to shut down comes barely eight months after the launch of Huobi’s Australian subsidiary, meaning it will be taken over by the parent Huobi Global. According to the official tweet on February 24, 2019, and an official Facebook post on February 25, 2019, the main reasons leading to the decision are the cryptocurrency market slump and recent redundancies.
At the time of launching the Australian arm, the firm hailed “the move to Australia as a natural fit,” but it appears this outlook has since changed. According to the official statement, the takeover by Huobi Global is effective February 26, 2019. The Tweet read:
“Please be informed that due to poor market conditions and associated recent staff redundancies here at Huobi Australia, all operations, including the management of our platform, social media channels, and customer support will be managed by our team at Huobi Global headquarters starting 26th February 2019.”
Record Long Bearish-Market
The Huobi Australian team led by CEO Adrian Harrison, an expert financier with 20-years’ experience over most of Asia, is now at a crossroads following the recent move from Huobi headquarters.
The other team members to be affected will be Jack Zhang, business operations manager, Lei Dong, the financial controller, and Lien Chin who was the head of growth and marketing.
According to local news outlet ABC, AUSTRAC has registered a record 246 cryptocurrency exchanges since April 2018. That number of crypto exchanges number appears to be on the higher side considering that the entire Australian population is less than 25 million. This means observers could easily expect to see similar moves given the record-long bearish cryptocurrency market that has affected bitcoin and the other cryptocurrencies for the better part of 2018.
Huobi Global is not alone in choosing to reduce a head count and closing down regional operations as a result of the ongoing crypto winter. Leading firms that have made similar moves include mining giant Bitmain, Canadian cryptocurrency exchange Coinsquare, Decentralized social network Steemit and blockchain software firm ConsenSys, all of which have made staff cuts and partial closures.
Huobi Global is ranked the fifteenth largest cryptocurrency exchange globally by trade volume according to CoinMarketCap. Even with the reported cessation of Australian operations and ongoing redundancies, Huobi is reported to have acquired a 100 percent growth in worldwide trading volumes in 2018 over the 2017 figures.