Huobi (Thailand), a digital asset exchange, has temporarily suspended all trading services, asking customers to withdraw assets from the platform by Aug 31, after the Securities and Exchange Commission (SEC) ordered the exchange to cease operations until it improves its organisational structure and reconfigures its platform to meet SEC standards.
According to a source at Huobi who requested anonymity, the exchange is considering changing its name to DS Exchange when it resumes trading. The exchange is now working to improve its systems and build a new trading platform.
However, there are currently over 100 customers whose trading accounts and assets remain with the company. It is expected that they will withdraw their assets to other exchanges by the due date, the source said.
In April, the SEC had asked Huobi to build a new trading platform, employ a new IT service provider, upgrade the quality of its staff to better serve customers and complete the process between April 29 and May 25.
However, the exchange was unable to upgrade its information technology system, the customer asset preservation system, and the account opening process, including the identification or know-your-customer process within the specified period.
Therefore, Huobi informed of its failure to comply with the SEC order, who then asked the exchange to temporarily suspend services until Aug 31.
"If clients do not redeem assets within the time limit, the exchange will have to arrange for the assets to be deposited in a secure system and report the clients' outstanding assets to the SEC at the end of each business day until completion. If the exchange fails to rectify deficiencies within the specified time period again, it will not be able to resume operations until all requirements are met," the SEC stated.
The order by SEC's board of directors to Huobi (Thailand) to temporarily suspend its business came on June 10. On Tuesday, Huobi announced on its official website the process for clients regarding withdrawing their assets from the exchange.
Huobi was licensed to operate a digital asset exchange business on July 12, 2019. The company's major shareholders include Sakda Katekaew and Hongsenmao (Thailand) Co.
An investor who requested anonymity said local small digital asset exchanges are not very active in trading. Trading of digital assets is concentrated in some major exchanges and many investors trade offshore with Binance, the world's largest cryptocurrency exchange.
Since 2019, the SEC has allowed seven companies to operate a digital asset exchange business, including Bitcoin Co, or BX, which was previously the largest operator. However, the company filed for closure on Sept 30, 2019, after the digital asset business became regulated under the Digital Asset Decree.
Currently, there are five active players remain in the market, namely Bitkub, Satang Pro, Zipmex, Upbit, and Z.comEx.