- Huobi has allegedly agreed to buy Bitflyer and Bithum for a combined $1 billion
- Chinese authorities have put a spanner in the works, according to Wu Blockchain
- Huobi has allegedly been under investigation since early November
Huobi’s attempts at purchasing Bitflyer and Bithumb exchanges “will be suspended”, according to Chinese crypto reporters Wu Blockchain. Wu Blockchain reported that Huobi Global, which is China’s biggest exchange, has agreed to purchase Japanese exchange Bitflyer and Korean exchange Bithumb, but that these acquisitions are likely to be halted by Chinese authorities while they investigate Huobi and its COO Zhu Jiwei.
Huobi Looking to Strengthen International Market
Wu Blockchain reported that acquiring both Bitflyer and Bithumb would set Huobi back $1 billion, with deals being done for $500 million each. They also said that Binance was showing an interest in snapping up Bithumb but that Huobi outbid them by $100 million.
The reason for Huobi’s sudden desire to expand within Japan and South Korea is a response to its recent contraction in other areas – in November last year Huobi announced that it was pulling out of the U.S., leaving South Korea and Japan as its last remaining international markets. It is no surprise therefore that it has sought to cement its reach in these regions through the acquisitions of Bitflyer and Bithumb.
Chinese Authorities Throw a Spanner in the Works
However, despite deals being seemingly agreed, Wu Blockchain states that the finalization of any deals have been interrupted by the Chinese authorities:
Both acquisition negotiations lasted for a while, but due to the sudden investigation in early November, both acquisitions will be suspended until the Chinese government’s investigation end. Founder of Huobi is not allowed to leave China since 2017.
— Wu Blockchain（Chinese Crypto Reporter） (@WuBlockchain) November 17, 2020
The legal situation surrounding Huobi’s top brass is unclear. Wu Blockchain don’t state why Huobi founder Leon Li has not been allowed to leave China since 2017, but they do attest to the investigation that reportedly saw COO Zhu Jiawei arrested, something that Huobi later denied.
With Binance waiting in the wings to usurp Huobi and snap up Bithumb, which is in legal trouble of its own, and the knowledge that Bitflyer is also up for sale, Huobi could soon see its expansion plans go up in smoke if the Chinese authorities take an unfavorable view of Huobi’s actions.