Hong Kong-based tech company TideBit is looking to expand its bitcoin trading operations, seeing growing demand from Chinese investors frozen out by Beijing’s crackdown on the virtual currency.
Once the world’s largest market for virtual currency trading, China has been stepping up its policing of cryptocurrencies. Bitcoin exchanges such as Huobi, OkCoin and BTCC have announced that the trade would be halted.
But for TideBit, the crackdown has translated into new business.
“The ban did not stop them [Chinese investors] from buying cryptocurrencies,” said Terence Tsang, chief operating officer at TideiSun. “In the last few weeks, we have seen a lot of mainland customers opening up accounts at TideBit. They still want to play the game. I see a growing need in that they will come to Hong Kong or Singapore to buy cryptocurrency,” he said.
Chinese investors fume over Beijing’s bitcoin crackdown
TideBit was set up two years ago by think tank researcher turned businessman Chen Ping and is owned by TideiSun Group. Chen is best known for establishing the iSun Affairs online magazine, which is known for hard-hitting stories about Chinese political and social issues that are mostly banned in mainland China.
“At the time [of starting the platform] we had a documentary video platform. We liked users to pay using bitcoin or ethereum and we asked, ‘where do they get bitcoin?’ There weren’t many virtual currency exchanges in Hong Kong, so that’s why we started one,” Tsang said.
He added that the company is hiring, adding to a payroll of about 70 people in Taiwan and Hong Kong.
TideBit offers customer service via the messaging platform WhatsApp. Its transaction volume is around 50 to 100 bitcoin a day and it collects revenue from deposit fees, withdrawal fees and transaction-based fees.
“Right now it’s a trading platform to buy bitcoin and ethereum. We are planning to offer more financial products like futures and derivatives,” said Vincent Poon, chief growth hacker at TideBit.
“We also offer different products like payment solutions, wire transfers and different types of blockchain projects. We are not just a trading platform, we also have a blockchain ecosystem.”
Why has China declared war on bitcoin and digital currencies?
Earlier this month, the People’s Bank of China said the practice of initial coin offerings (ICOs) – fundraising by the issue of digital currencies outside the regulatory framework – was illegal. Up to 90 per cent of the ICOs launched on the mainland were found to have been fraudulent, the central bank said.
TideBit isn’t currently involved in ICOs, but Poon said the company would review the issue.
As regulators review virtual currencies, Tsang said the company wants to expand to countries where there are clear guidelines.
“We are getting a bitcoin exchange licence in Japan,” said Tsang, adding that the company will be also be setting up offices in Singapore and Taiwan.