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The users at the Huobi exchange can now withdraw digital tokens only after 24 hours of their purchase. The decision came as another blow to the crypto investors in China.
Huobi, the cryptocurrency exchange, has put a 24-hours condition on users who would like to withdraw digital tokens in over the counter transactions (OTC). This will discourage the speculation rising against the virtual currency.
The decision has come as another blow to the cryptocurrency investors in China as Beijing has also banned using cryptocurrencies in the country, one of the latest crackdowns that have happened.
New directives for traders
As per the new directions, the traders are allowed to take out tokens from exchanges only after 24 hours of making their purchase. In certain cases, the restriction is imposed for 36 hours. Such cases refer to a condition where the users are at higher risks as was directed by Huobi’s risk control system.
The new directions are implemented to ensure the safety of the users’ assets and avoid any losses caused by the inflow of speculative capital.
Restrictions on withdrawal
After the company applied restrictions on certain users in August last year, the new directives now cover all the users on the Huobi platform. The company had put the precondition of up to 36 hours earlier for cryptocurrencies withdrawal on certain users. However, now a 24-hour restriction is mandatory for all.
Issues in OTC transactions
OTC transactions are the only methods for Chinese investors to purchase bitcoin and other cryptocurrencies with fiat money. In 2013, Beijing had banned financial institutions and payment platforms dealing with bitcoin. In 2017, the country had shut down cryptocurrency exchanges.
Under OTC transactions, transactions are unregulated almost anywhere like on a platform or even on a chat group. Here fiat money is exchanged for cryptocurrencies. Exchanges also operate OTC platforms. However, any legal tender transfer is done outside the purview of these platforms.
Hence, it is believed that the OTC transactions are used for money laundering and capital outflows. It drives speculation and then volatility is seen in the prices of cryptocurrencies.
Boycotting cryptos
This restriction of 24 hours to withdraw cryptocurrencies has come just after Huobi prohibited China from trading derivatives. Beijing continues its crackdown on cryptocurrencies.
BTC China, the first cryptocurrency exchange in China, has also stopped trading in Bitcoin as the government imposed restrictions on the cryptocurrency sector. Huobi suspended the bitcoin mining services in May. It was the first Chinese platform that had also suspended the sales of cryptocurrencies mining equipment in the world’s second-largest economy.
Other jurisdictions in China are tightening their grip on crypto businesses. Binance, one of the world’s largest cryptocurrency exchanges, was banned by the regulators in the UK.
Binance was also banned in the US. The Monetary Authority of Singapore is scrutinizing the application process of the local unit of Binance, which had applied for a license to operate in the city-state.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
