Huobi, one of the world’s largest cryptocurrency exchanges by trading volume, is de-registering a company entity in Beijing, a move that has sent shockwaves through the market, causing a 22% plunge today for Huobi Technology’s stock in Hong Kong.

Beijing Huobi Network Technology Co. Ltd., set up in December 2013 with registered capital of 10 million yuan (US$1.54 million), last Thursday submitted an application to a local authority to deregister the company, according to a notice disclosed on China’s National Enterprise Credit Information Publicity System.

Huobi Chairman Li Lin is set to act as the manager in charge for the closure of the Beijing entity, and creditors are being asked to report their rights to a team led by him, the notice said. Public business records show that Li holds a 70.5% stake in the Beijing entity.

“This is an entity that Huobi registered in Beijing years ago, in the early stages of development,” a spokesperson for Huobi Global told Forkast.News in an emailed response to a request for comment. “Because this entity has not had any business operations, it is unnecessary and [Huobi] has applied for cancellation.” 

With crypto trading banned in mainland China, Huobi has been operating its trading business outside Chinese jurisdiction. But Beijing Huobi Network Technology continued to provide internet information services related to blockchain technology.

Forkast.News found on Tuesday morning that an app named Huobi OTC, supplied to Apple’s App Store by the Beijing entity, was still available for downloading. “Service of Huobi OTC is now accessed through the Huobi Global app. This OTC app is no longer maintained and we plan to remove it from the App Store later,” Huobi told Forkast.News.

In the wake of the Beijing entity’s closure, the Hong Kong-listed stock of Huobi Technology Holdings Ltd. plunged by 21.88%, closing at HK$9 today.

It is not the first time that a major crypto exchange has closed an entity in China. Last month, OKEx also applied to deregister Beijing Lekuda Network Technology, one of its mainland Chinese entities.

Compared with Binance, Huobi was considered more favored by Chinese authorities, at least in the eyes of Chinese state media. Last year on Central Television Channel 13, Huobi was highlighted as being an important part of the tech cluster in Hainan, a free-trade port in China.  

Some industry sources told Forkast.News that the closure of Huobi’s Beijing entity wouldn’t significantly affect the crypto industry because the Beijing company didn’t seem to engage in crypto trading. An analyst at a crypto research firm said that it could be Huobi’s attempt to clean up its China operations to meet regulatory requirements.

Last month, Huobi stopped providing crypto derivative trading services to users in China and Taiwan, according to an updated user agreement.

Kelly Le and Michelle Lim contributed to this report.