05 Nov 2019 #Bitcoin
The lack of crypto regulations in the United States has beginning to seriously affect the US traders' ability to join foreign exchanges. Reports of more and more exchanges denying access to US residents are constantly coming in, with Singapore-based Huobi being the latest example.
Huobi had recently announced that it plans to freeze US users' accounts by mid-November 2019. The move was announced as part of the exchange's efforts to crack down on users that violate the User Agreement. The announcement came after several months of depreciation of accounts owned by US-based users, which will end on November 13th, when all such accounts will be frozen.
The last several years have brought a number of positive developments for the crypto industry. Countries around the world have recognized that crypto is more than just a passing trend, and have brought some legislation that would outline ground rules for businesses and individuals wishing to operate in the crypto space.
This mostly includes countries in Europe and Asia, where crypto businesses are advancing most rapidly for several years, now.
However, when it comes to the US itself — the country's regulators have done little to nothing to catch up to the rest of the world. The SEC did not bring any functional framework that would regulate taxes, business running, or any other aspect of the crypto industry. Not only that, but there is still no assurance that the regulator plans to publish any such regulatory framework in the foreseeable future.
As a result, a number of exchanges have decided to deny access to US users in hopes of avoiding legal problems in the future. One of the best-known examples to this day is Binance, which denied access to US investors several months ago. Of course, Binance still wanted to have US investors and traders included in its business in some way, which led to the launch of Binance.US, a US-based subsidiary that only deals with coins that the SEC did not flag as securities.
US traders were not allowed to begin with
As for Huobi, the exchange simply decided to cut its losses and ban US traders completely. This has been one of the largest exchanges in Asia for quite some time now, and it had some of the highest trading volumes in the region. But, when a large number of Asian countries decided to crack down on cryptocurrencies and/or attempt to regulate them, the exchange started working on plans to expand and open offices in different countries, including Japan and Korea.
Now, Huobi's Terms of Service did not exactly invite US investors to come and make accounts on its platform. In fact, the Terms clearly state that US users are not allowed to do so. However, many still managed to find a way to create accounts and use the platform, regardless.
Now, Huobi plans to become more strict when it comes to denying access to US users, and its new announcement states that any such user has nearly two weeks to withdraw their funds and prepare for having their account frozen. Those who fail to do so before November 13th will risk losing their money irreversibly.
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