The cryptocurrency exchange landscape has undergone dramatic shifts over the past decade, shaped by regulatory pressures, technological innovation, and evolving market demands. Among the most notable players in this transformation are Huobi and OKEx, two pioneering platforms that emerged from China’s early digital asset boom. While both began under similar circumstances, their post-regulation trajectories have diverged significantly—reflecting two distinct philosophies on the future of blockchain businesses.
This article explores how Huobi and OKEx responded to China’s 2017 crypto crackdown, the strategic decisions that followed, and what these paths reveal about the broader evolution of cryptocurrency exchanges in a regulated world.
The Rise of Huobi and OKCoin in China’s Early Crypto Era
Founded in 2013, both Huobi and OKCoin rose to prominence during Bitcoin’s formative years—a time marked by explosive price growth and increasing public interest. That year alone, Bitcoin surged from $13 to a peak of $1,242, driven in part by global financial uncertainty such as the Cyprus banking crisis. In China, investor enthusiasm was particularly strong. Unlike Western markets where ideological belief in decentralized currency played a major role, Chinese users largely approached Bitcoin as a speculative asset.
Academic research, including studies by J. Bouoiyour et al. (2015), has shown a significant correlation between Bitcoin price movements and the Shanghai Composite Index during this period—highlighting the influence of Chinese capital flows on global crypto markets.
With favorable timing and robust domestic demand, both exchanges thrived. Huobi gained an edge with its policy of permanent zero trading fees, quickly becoming the world’s largest exchange by volume. It attracted high-profile investments, including a Series A round led by Sequoia Capital. OKCoin also secured substantial funding—$10 million from investors like Mandra Capital and Chinaccelerator—solidifying its position as a market leader.
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The 2017 Crackdown: A Turning Point for Chinese Exchanges
Everything changed on September 4, 2017, when China’s central bank and six other regulatory bodies issued a sweeping ban on initial coin offerings (ICOs) and ordered all domestic cryptocurrency exchanges to shut down. The move sent shockwaves through the industry.
Overnight, platforms like Huobi and OKEx were forced to exit mainland China. This regulatory shift created a power vacuum—one that Binance swiftly filled by positioning itself as a truly global, offshore exchange. By avoiding direct ties to any single jurisdiction and leveraging agile operational strategies, Binance overtook its former rivals in trading volume within months.
Despite the exodus, Chinese-founded exchanges continued to dominate global rankings. At one point, BITMEX led daily trading volumes at $17.9 billion, followed closely by Binance ($16.1B), OKEx ($14B), and Huobi ($10B)—a testament to the enduring influence of teams rooted in China’s early crypto ecosystem.
Divergent Paths: Global Expansion vs. "De-Crypto" Transformation
After leaving China, Huobi and OKEx took fundamentally different approaches to survival and growth.
Huobi’s Globalization Strategy
Under CEO Leon Li, Huobi embraced an aggressive global expansion strategy. In early 2018, the company announced plans to launch localized platforms across key markets:
- Huobi Korea launched on March 26, offering KRW-denominated trading.
- Partnerships were formed in Australia to develop compliant digital asset services.
- An office opened in London, Europe’s most active crypto hub.
- Plans were announced for a Canadian compliance team, marking Huobi’s eighth international presence after Singapore, Japan, South Korea, Hong Kong, the U.S., Thailand, and Australia.
Simultaneously, Huobi restructured its operations within China. In May 2018, Huobi China relocated to Hainan—not as a trading platform but as a blockchain research and education center, focusing on policy advisory, industry insights, and technical training. This move signaled a clear separation between trading activities (overseas) and blockchain innovation (domestic), allowing the brand to maintain a legal footprint in China while complying with regulations.
OKEx’s “De-Crypto” Pivot
In contrast, OKEx—under founder Xu Mingxing—pursued a more radical transformation: de-cryptofication.
Xu began distancing himself from the exchange brand, stepping down as CEO in February 2018 and transitioning into roles focused on technology research. He became院长 (Director) of the OK Blockchain Engineering Research Institute—a position emphasizing core blockchain infrastructure development, not trading.
His public statements further reinforced this shift. After former central bank governor Zhou Xiaochuan commented on digital currencies in March 2018, Xu shared the remarks internally and declared he had reported three priorities to leadership:
- Global expansion of OKcoin Group
- Focus on foundational technology R&D
- “Be ready to donate everything to the state at any time”
This last statement sparked widespread debate. Dubbed the "Crypto马云 (Jack Ma)", Xu positioned himself as a patriot committed to national interests over profit—a narrative likely aimed at improving relations with regulators.
The pivot wasn’t just rhetorical. In May 2018, Xu spoke at the launch of Beijing’s Blockchain Ecosystem Investment Fund—a 1 billion RMB initiative focused exclusively on tokenless blockchain applications. Notably, he appeared not as the head of OKEx but as a “renowned blockchain expert.” Even Beijing Financial Bureau Director Hao Xuewen acknowledged the transformation:
“He didn’t talk about coins—he talked about how blockchain technology can develop deeply. I hope he can make a clean break from his past involvement with tokens and exchanges.”
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Leadership Shifts: The Significance of Li Shufei’s Move to Huobi
One of the most symbolic moments in this divergence came in May 2018 when Li Shufei, then CEO of OKEx, abruptly resigned and soon after joined Huobi Group as Board Secretary and VP of International Business Development.
His move wasn’t just a personnel change—it reflected deeper organizational cultures. Li publicly expressed frustration with his former employer, listing other senior executives who had left OK under tense circumstances. Given Xu Mingxing’s increasing focus on state alignment and technological purity, it’s plausible that commercial ambitions clashed with ideological direction.
Moreover, non-compete clauses likely played a role. As seen with He Yi—once known as the “queen of crypto”—who left OK but couldn’t join another exchange until her non-compete expired in August 2017—such agreements can delay career transitions in this tightly knit industry.
Li Shufei’s shift to Huobi underscores a broader trend: as exchanges mature into multinational entities managing diverse portfolios—from trading and custody to venture investment and education—executive mobility will become more common.
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FAQs: Understanding Exchange Transformation in the Post-China Era
Why did Chinese crypto exchanges leave China?
In 2017, Chinese regulators banned all domestic cryptocurrency trading and ICOs due to financial stability and fraud concerns. Exchanges had no choice but to relocate overseas or restructure into non-trading entities.
What is “de-crypto” transformation?
It refers to shifting away from cryptocurrency trading toward blockchain technology development, enterprise solutions, or government-compliant applications—often without issuing or supporting tradable tokens.
Is Huobi still connected to China?
Yes—but indirectly. While Huobi Global operates outside China, Huobi China functions as a blockchain think tank in Hainan, focusing on research, policy consultation, and education without facilitating trades.
Can OKEx return to China?
Unlikely under current regulations. However, by aligning with state goals through research initiatives and avoiding public association with crypto trading, OK’s parent company maintains some level of legitimacy in official circles.
How do these changes affect users?
For international users, services remain largely unchanged. But for Chinese citizens, access is restricted via IP blocks and KYC policies. Most trading now occurs through offshore accounts or peer-to-peer methods.
What does the future hold for crypto exchanges?
The trend points toward regulatory compliance, institutional-grade infrastructure, and multi-service ecosystems combining trading, staking, lending, education, and venture capital—all while navigating geopolitical boundaries.
Conclusion
The divergent paths of Huobi and OKEx illustrate two viable models for surviving regulatory upheaval: global commercial expansion versus ideological repositioning. One chose to scale outward; the other inward.
As governments worldwide tighten oversight on digital assets, these case studies offer valuable lessons for exchanges everywhere: adaptability isn’t optional—it’s existential.
Whether through international growth or technological reinvention, the next era of cryptocurrency will belong not to those chasing short-term gains, but to those who understand that long-term sustainability requires strategic vision—and sometimes, a complete transformation.
Core Keywords: cryptocurrency exchange, blockchain technology, global expansion, de-crypto transformation, regulatory compliance, Huobi, OKEx, digital asset trading