Barely a week after denying rumors of a merger, Huobi and Poloniex have entered into a strategic partnership that both parties say will improve their offerings for users.
“The two exchanges will progressively cooperate in multiple business aspects including HT ecosystem development, project connectivity, liquidity sharing, and global compliance – committing to build the world’s top trading platform and gaining the trust of users,” said Huobi’s statement on the alliance.
Huobi says that its advisory board will begin evaluating all Poloniex’s projects and confirms that top-performing projects will be listed on Huobi. This move will provide more visibility for the promising projects as millions of Huobi users will have direct access to them.
Huobi confirmed that the move was “to enhance its globalization strategy” and that it will be working to establish more strategic partnerships in the industry.
Before the strategic partnership announcement, there were swirling rumors of a merger between both entities. Parties denied the claims of a union but barely a week later, a strategic partnership was announced, which confirmed speculations of a potential collaboration.
TRON founder Justin Sun acquired Poloniex from Circle in 2019, and his position on Huobi’s advisory board has raised some eyebrows in the digital asset industry over the reports of liquidity sharing between exchanges. Poloniex has run into trouble with U.S. regulators after it reached a $10-million settlement with the Securities and Exchange Commission (SEC) for selling unregistered securities in 2021.
Poloniex also faced a tough time with South Korean regulators, resulting in it being blocked in the country. On-chain analysis shows that Poloniex’s daily spot trading volume is only one-tenth of Huobi’s volume, making the strategic partnership important for the exchange.
Huobi is going global
This year saw Huobi make significant changes to its operations after exiting Mainland China in the wake of the government’s crackdown. The departure forced the exchange to consider a new expansion strategy to ensure its survival amid stiff competition from rivals.
In June, the company launched an investment arm while Hong Kong-based About Capital purchased a controlling share in the firm. To further its expansion, the company announced a planned relocation of its headquarters to the Dominican Republic.
The exchange had to grapple with rumors of mass layoffs and resignations, and as part of efforts for a rebrand, the firm disclosed that it was ditching “Global” from its name. Huobi’s new globalization roadmap targets the Caribbean, Southeast Asia, and Europe.
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