Huobi Group, the parent company of the world’s third-largest crypto exchange Huobi is creating a Communist Party committee as part of its obligations to the Chinese government. This is the first such endeavor by any cryptocurrency and blockchain-focused company in China.
According to the South China Morning Post, the company is establishing the Party committee through an additional subsidiary, Beijing Lianhuo Information Service (BLIS). Beijing Lianhuo was established in April this year by Li Lin. It has a registered capital of 20 million yuan (US$2.9 million).
Li expressed his contentment over the new development saying, “Today is a milestone for our company.”
Appreciating the blockchain friendly policies of the Communist Party, Lin remarked, “Under the cordial care of the Party Working Committee of Haidian, the party branch of the Beijing Lianhuo Information Service Ltd. was gloriously established.”
As per the laws of the Communist Party, it is mandatory for a company in China, particularly the state-owned ones, with at least three party members as employees, to establish a branch of the party. The purpose of the chapter is usually to promote the party line. Though it is not compulsory for private companies to comply with this directive, Chinese tech enterprises like Baidu, Alibaba, Xiaomi, Douyu, Tencent Holdings, and Ofo have established their own Community Party committee. This has been perceived as a goodwill gesture by the private firms towards the Community Party and thereby, develop cordial relations with the government.
While China has embraced blockchain positively, it still maintains an anti-crypto stance. In September last year, the government had imposed a blanket ban on ICOs and cryptocurrency trading in the country resulting in a massive outflow of crypto exchanges, investors to neighboring Asian countries, especially Hong Kong. Companies like Huobi and OKCoin were also seen shifting their exchange businesses to crypto-friendly jurisdictions outside the country.
Again, earlier this year, obliging to a government order, WeChat and Alipay closed the accounts of cryptocurrency-based merchants.
Founded in China in 2013, Huobi now operates its main exchange service from Singapore. According to data from CoinMarketCap, Huobi is today, the world’s third-largest cryptocurrency exchange with a daily trading volume of US$560 million.