Huobi, the third largest encrypted exchange with trading volumes, is trying to fill a gap in the cryptocurrency community of Russia.
This month, the exchange opened an office in Moscow, the first major encryption platform to have a physical presence in the country, in particular with a call center in Russian. But the ambitions of Huobi, based in Singapore, go further, lending and renting space for Russian miners, shaping the country's rules and forming local blockchain talent.
The call center alone can be an important element of differentiation, however. Although the main encryption exchanges like Binance, OKEx and Bitfinex now have Russian-language interfaces, getting real-time support in case of technical problems has been a problem for many users in Russia who do not speak English, Chinese or Korean.
"None of the big trades would respond to your request in Russian," a Russian trader named Anton, who did not want to reveal his full name, told CoinDesk.
For several years, the gap was filled by the now defunct exchange BTC-e, which had not only a Russian support staff, but a network of local over the counter (OTC) dealers that had facilitated cryptocurrency purchases in absence of regulated rail ramps in the country.
But BTC-e was closed by the US FBI in July 2017. Subsequently, a new platform called WEX took its job until July, when the fiat and encrypted withdrawals were frozen.
Since then, there is no mainstream platform offering complete support for users in Russia. So now Huobi is coming aggressively.
The 30-person office of Huobi in Moscow was inaugurated on 12 November. In addition to the call center, this site provides back-office support for OTC trading and listing and personal managers for large clients, Arthur Lewis Andrew Grachev, the head of the Russian office, told Arthur Lewis.
"If someone wants to start negotiating with $ 1,000, they can come to the office and register with the help of a personal manager," Grachev said.
To attract as many new users as possible, Huobi Russia offers commissions of less than 0.1% for users who trade more than 50 bitcoins in two weeks in November, says the company's website. In addition, users will receive a monthly "cash back" reward, Grachev said: 20% of the trading fees that users pay on the exchange will return to their account in the form of Huobi tokens, which can then be used on the platform to pay for services. , or cashed.
Initially, Huobi's plans were even more ambitious: the exchange wanted to allow deposits in Russian rubles, but local experts said it was a bad idea.
"They consulted us a lot and in the end, I think, we made them feel disappointed," Vladimir Demin, head of the Digital Transformation Center at the development bank owned by the Russian government Vnesheconombank (VEB), told CoinDesk. "They were interested in providing fiat operations, but we told them it's impossible."
However, Russian users will be able to buy cryptocurrency for rubles using Huobi's OTC exchange service and transferring it seamlessly to their trading accounts, Grachev told CoinDesk. The OTC platform is online, but so far it has too few users from Russia, so Huobi intends to attract local OTC traders with lower commission rates than other OTC platforms, Grachev said.
With three bills related to blockchain, cryptocurrencies and initial coin offerings (Ico) currently blocked in the Russian parliament, the state Duma, the local regulatory environment is unclear and is probably not conducive to the growth of the sector.
However, government-backed institutions are closely observing the camp and launching various local blockchain pilots for government services, such as government-sponsored prescription drug delivery or land registry.
"We started from projects on blockchain without using tokens or cryptocurrencies," said Demin. "But we understand that using this technology only in a non-symbolic way is like jumping halfway across the abyss".
In August, Huobi signed with the VEB Digital Transformation Center and provided expertise that will be adapted for Russia by local experts and used for the development of future regulation in the country, Demin said.
"We were watching this camp and Huobi became the most suitable partner because they are already working with the governments of Australia, Singapore, China," he said, adding:
"We are consulting the Bank of Russia and the State Duma to add some practical elements to those invoices".
In addition to opening the Moscow office, Huobi will train blockchain entrepreneurs by participating in a special program for startup blockchain at the Plekhanov University of Economics, one of the best Russian universities.
The university is in the process of concluding a contract with Huobi, Nadezhda Surova, head of the university's entrepreneurship and logistics department, told CoinDesk.
Initially, Huobi arrived at the university looking for technology professionals, he said, and later a committee of experts within the Ministry of Digital Development of the Russian government approved the partnership.
Further plans by Huobi in Russia include the provision of loans to miners for the purchase of specialized mining chips, or ASICs, and space for them to be rented, Grachev said. According to him, these services could be available as soon as the first quarter of 2019.
Coming to Russia is part of Huobi's biggest expansion plans: in August the exchange announced plans to open offices in the Philippines, Russia, Taiwan, Indonesia and Canada, according to South China Morning post.
According to CoinMarketCap, Huobi's total 24-hour volume (excluding zero-cost transactions and mining transactions) is $ 595 million, which makes it n. 3 between the exchanges after Binance and OKEx.
Image of Moscow via Shutterstock