Wu said: Huobi wants to buy the largest exchange in Japan and South Korea, or it may be delayed due to the investigation

Wu said blockchain exclusively learned that Huobi was previously in communication about the acquisition of Bitflyer, Japan's largest exchange, for about $500 million. On the 17th, South Korean media The Bell exposed Huobi's attempt to acquire Bithumb, the largest exchange in South Korea. Wu said that blockchain learned that the two negotiations have been launched for a period of time, and due to Huobi's sudden involvement in the Shanxi investigation storm, the two acquisitions may be delayed.

Bitflyer is the largest cryptocurrency exchange in Japan with 2.5 million users. Bithumb is the largest cryptocurrency exchange in South Korea. According to Coingecko spot data, Bithumb ranks 12th, Bitflyer ranks 19th, and Huobi ranks 7th.

Huobi's global development is relatively slow, most of the high-level structure chart is all Chinese employees (compared to he only one Chinese employee in the high-level of Binance), investment projects and ecological layout are basically limited to China, and users and revenues are mainly from China. In November 2019, Huobi announced its withdrawal from the US market. Japan and South Korea are the only remaining parts of Huobi's international market development. In the high-level structure chart previously disclosed by Huobi, Huobi Japan CEO and Huobi Korea CEO are among them.

Huobi Japan CEO Chen Haireng went to Japan to study in 1992, and has held key positions in Japanese super large companies such as NTT, index, and DAC, and served as CEO of Baidu Japan from 2006 to 2013. Huobi South Korea CEO Zhao Guofeng is an old man in the Chinese coin circle, and the media calls him a well-known Bitcoin robot brick mover, the first person in Southeast Asia to hedge arbitrage, the founder of Bitcoin World, and the founder of Rfund.

In 2018, Huobi announced its holding of the BitTrade exchange, which has a legal license in Japan. In April 2020, Huobi HT was rarely approved by the Japanese Financial Services Agency and the first platform coin approved in Japan. However, according to people familiar with the matter, despite the acquisition of BitTrade, whether it is Huobi Japan or Huobi Korea, the transaction volume and KYC users are very small, and the transaction volume of HT in Japan is also very small. OKEx chief industry researcher Kong Deyun once pointed out that although Japan and South Korea have a high degree of trading activity, users show a very strong "closed" characteristics, mainly using local exchanges, and it is difficult for outsiders to expand. Choosing to acquire the existing largest exchange is a logical move to do business locally.

This also shows that Huobi is in a very good financial position. This year, with the rapid rise of businesses such as Huobi contract derivatives, a large amount of profits have been obtained that can be used for acquisitions. Bloomberg has disclosed that Huobi's revenue in 2019 is about $680 million. Margins are estimated at 50% or higher. Due to the sharp rise in coin prices this year, Huobi revenue is expected to rise by more than 50%.

However, there are also some problems in limiting the focus of overseas expansion to Japan and South Korea. The Japanese people are more conservative about cryptocurrencies, and the Financial Services Agency has strict controls on 1CO, derivatives, etc., so the valuation of Bitflyer, the largest exchange, is only 500 million US dollars. South Korea,000, despite its high public sentiment, is small, and the South Korean Police Agency raided and arrested the chairman of Bithumb in September, and South Korea also faces tough regulatory policies. Bithumb has a bad reputation and has been widely reported for scandals such as brush volume. In addition, a Chinese transaction is trying to acquire the largest local cryptocurrency exchange in Japan and South Korea, and it is doubtful whether local regulators will approve it.

Both acquisitions originated before the "Black Swan" event in Chinese mainland. On October 16, OKEx began to stop withdrawing coins, and the media revealed that the founder Xu Xingxing disappeared a week ago and was assisting the Shanxi police in the investigation. On November 2, Wu said that blockchain learned that Huobi COO also assisted the Shanxi police in the investigation, but the Huobi platform did not restrict the withdrawal of coins. Due to the panic in the market, Huobi coin set records for the outflow and inflow of Bitcoin throughout the year, respectively.

According to people familiar with the matter, although the negotiations have been launched for a long time, due to this investigation incident, Huobi's acquisition of the largest exchange in Japan and South Korea may be delayed, and it is still in the undecided day. However, some sources revealed that due to this investigation, Huobi began to reflect on the slow pace of relying too much on the Chinese market and the previous overseas expansion, and will pay more attention to overseas markets in the future, but everything still needs to survive this disaster.