China FUD: Huobi Running Normally, OKEx Walks Back on C2C Trading Suspension

China FUD reached its crescendo when the market dumped over the weekend, wiping out a trillion dollars in the process.

Altcoins took the biggest hit, with a vast majority losing more than 90% of their value. Among the top coins, Bitcoin didn’t make a new low but ended up touching $31,100. Unlike Bitcoin, Ether got hit hard and dropped to about $1,725 on Coinbase, a level last seen in late March.

This latest sell-off was incited by the rumors that the biggest Asian cryptocurrency exchanges Huobi and OKEx, are closing their deposit and withdrawals.

Besides the futures contracts and leveraged investment products “temporarily” not available to Huobi’s new users from “a few specified countries and regions,” it was rumored that the exchange would stop its miner hosting services on mainland China as well.

Not only crypto prices, but the Hong Kong-listed companies of OKEx and Huobi also tumbled by 15% and 20%, respectively, representing the panic among investors regarding the Chinese government's policy.

Huobi later clarified that the reports of it shutting down fiat-to-crypto OTC services were “fake news” and that it is running normally and withdrawal & deposits are not closed. OKEx, meanwhile, walked back on offline C2C trading suspension.

While people were worried that the government might shut down all the services, Matthew Graham, CEO of Sino Global Capital, said this is all just “ridiculous.”

“No idea why people would be worried about this, but since it’s going around: the Chinese government is not going to confiscate people’s funds in Huobi,” he said. “The Chinese government hates social unrest above almost all else. Confiscating funds in Huobi would be extremely counterproductive. It’s not logical in the least.”

I’ve said it before, I’ll said it again. The only regulation that matters for crypto is the US. Everything is exactly what CT calls it, FUD.

— Kyle Davies (@kyled116) May 21, 2021

As we reported, China banning Bitcoin is not something new; it actually first happened in December 2013. As for the latest actions, there is no definite information other than the State Council’s “crack down Bitcoin mining and trading.”

Even Hong Kong restricting trading to professional investors is nothing new, or that exchanges are required to have licensed to operate.

“Beijing's crackdown on cryptocurrencies in mainland China does not include Hong Kong. Similarly, Hong Kong’s cryptocurrency policy has nothing to do with mainland China,” noted local publication Wu Blockchain.

According to Wu Blockchain, the chaos will likely continue in the next week or maybe even a month. This, of course, will have an impact on the market as Chinese investors account for a good number of trading volumes of futures, and they hold both Bitcoin and Ethereum.