Huobi introduces 24-hour delay on cryptocurrency withdrawals to curb speculative trading
- Cryptocurrency exchange Huobi has imposed a 24-hour condition before a user can withdraw digital tokens in over-the-counter transactions
- It said a 36-hour requirement may apply in ‘certain cases’ in which users are ‘potentially subject to higher risks’
Under the new requirement, traders can only take out their tokens 24 hours after making any cryptocurrency purchase, according to a statement posted on Huobi’s Chinese-language website on Thursday. It also indicated that a 36-hour condition may be needed in “certain cases”.
Such cases refer to a condition in which users are potentially subject to higher risks, as detected by Huobi’s risk control system, a company spokeswoman said on Friday.
The new measure aims to “ensure the safety of users’ assets by effectively avoiding losses caused by the inflow of speculative capital”, according to the company’s statement.
Huobi’s latest initiative, which covers all users on its platform, comes after the company initially applied a precondition of up to 36 hours for cryptocurrency withdrawals on “certain users” in August last year.
Traders can enter into OTC transactions, which are relatively unregulated, almost anywhere such as on a platform or even in a chat group, where fiat money is exchanged with cryptocurrency assets. Exchanges also operate OTC desks, but transfer of any legal tender takes place outside these platforms.
As such, it is widely believed that OTC transactions are being used as a gateway for money laundering and capital outflow, as well to drive speculation that fuels the wild volatility of cryptocurrency prices.
Apart from mainland China, other jurisdictions are tightening up their scrutiny of cryptocurrency exchanges.