Cryptocurrency exchanges have undergone significant transformations in response to evolving regulatory landscapes. This article examines the divergent paths taken by two industry giants—Huobi and OKX—highlighting their strategic shifts post-China's 2017 regulatory crackdown.
The Rise of Huobi and OKCoin
Founded in 2013, both Huobi and OKCoin emerged as leading Chinese cryptocurrency exchanges during Bitcoin's explosive growth phase. Key milestones:
- Huobi: Secured Series A funding from Sequoia Capital, leveraging zero-fee trading to become the world's largest exchange by volume.
- OKCoin: Raised $10M in Series A funding, establishing itself as a major player with a focus on institutional services.
Bitcoin's 2013 rally (6,000% growth) fueled adoption, particularly among Chinese investors who dominated trading volumes due to high liquidity and speculative trading tendencies.
The 2017 Regulatory Turning Point
China's September 2017 ban on ICOs and domestic crypto trading forced exchanges to restructure:
- Huobi rebranded as Huobi.Pro, pivoting to global markets
- OKCoin transitioned to OKEx, relocating servers overseas
- Competitor Binance capitalized on the vacuum to become a market leader
Daily trading volumes (as of reference period):
- BITMEX: $17.9B
- Binance: $16.1B
- OKEx: $14B
- Huobi: $10B
Diverging Transformation Strategies
Huobi's Global Expansion Playbook
Regional Market Entries:
- Launched Huobi Korea (KRW trading) in March 2018
- Established Australian operations through local partnerships
- Opened London office for European expansion
Compliance Infrastructure:
- Deployed 8 international compliance teams across North America, Asia, and Oceania
Symbolic Return to China:
- Relocated Huobi China (blockchain research arm) to Hainan in 2018
OKX's "De-Crypto" Pivot
Leadership Distancing:
- Founder Xu Mingxing resigned as CEO in February 2018
- Assumed role as OK Blockchain Research Institute director
Controversial Public Statements:
- Xu's pledge to "donate exchange to the state" drew mixed reactions
Regulatory Alignment:
- Participation in Beijing's $100M blockchain fund (non-crypto focus)
- Public endorsement by Beijing financial regulators to sever crypto ties
Executive Exodus: The Li Shufei Case
The high-profile transition of OKEx's former CEO to Huobi in 2018 revealed:
- Strategic Culture Clash: Huobi's global growth vs. OKX's regulatory compliance focus
- Legal Complexities: Potential non-compete violations (similar to Binance's hiring of former OK executive He Yi)
- Industry Trend: Increasing talent mobility between competing exchanges
Key Takeaways for Crypto Exchange Evolution
- Regulatory Adaptation: Exchanges must balance compliance with business continuity
- Geographic Diversification: Emerging markets offer growth amid shifting policies
- Brand Repositioning: Decoupling from volatile crypto trading to stable blockchain services
👉 Discover how leading exchanges adapt to regulatory changes
FAQ: Cryptocurrency Exchange Transformations
Q: Why did Huobi and OKX leave China?
A: Due to China's 2017 ban on domestic cryptocurrency trading and ICOs.
Q: How does Huobi's strategy differ from OKX's?
A: Huobi pursued aggressive globalization, while OKX focused on regulatory compliance and reducing crypto exposure.
Q: What are the risks of exchange pivots?
A: Potential loss of trading volume, brand confusion, and talent attrition during strategic shifts.
Q: Can exchanges completely abandon crypto trading?
A: While possible (as OKX attempted), maintaining revenue streams during transition is challenging.