As part of its desire to forge deeper ties with the Chinese government, Huobi Group, the parent company of digital asset platform Huobi, has formed a Communist Party committee in China, according to an announcement by the company. The new branch was established by a Huobi subsidiary, Beijing Lianhuo Information Service, and will reside in the Haidian District of the municipality of Beijing.
Per reports on the South China Morning Post, the Beijing Lianhuo was established earlier this year, wholly owned by Huobi founder and chief executive Li Lin. Lin, who was full of praises for the government at the opening, calling the event a "milestone" for the company, adding:
"Under the cordial care of the Party Working Committee of Haidian, the party branch of the Beijing Lianhuo Information Service Ltd. was gloriously established."
For state-owned companies in China, the Communist Party charter mandates that enterprises with at least three Communist party members must set up a Communist party branch for promoting the party's ideals.
Private firms, on the other hand, are not obliged to set up these committees, but it's becoming evident that many want to, as they seek closer ties with the central government. Huobi becomes the first cryptocurrency company to take such step, joining the likes of Baidu, Tencent and Alibaba Group to set up party committees.
Huobi's cryptocurrency exchange, which is the world’s third largest crypto exchange by trade volume, was initially founded in China. The exchange was forced to move shop to Singapore, where it now operates, after Chinese regulators came down hard on cryptocurrency exchanges in the country last year.
This crackdown also extended to the suspension of cryptocurrency transactions on Tencent's WeChat Pay. Shortly afterward, Alipay issued a statement saying it would refuse services to virtual currency merchants.
The Chinese government has been anti-crypto but pro-blockchain, which explains why Huobi is paying homage to the tradition, as it still has blockchain operations in mainland China. Earlier this year, Huobi launched an investment fund focused on developing blockchain startups in China and South Korea.