Crypto exchange Huobi has expanded its offerings in Hong Kong by providing crypto spot trading and virtual asset custody services to local clients, following its application for a virtual asset exchange license from the Hong Kong Securities and Futures Commission. To ensure compliance with regulations and anti-money laundering requirements, Huobi HK is collaborating with independent auditors. This move is part of a broader shift toward Asia, as the region becomes more receptive to cryptocurrency and blockchain firms.
Hong Kong recently implemented a regulatory framework for digital asset exchanges, which will take effect on June 1. With the new regulations, retail investors are granted access to trade cryptocurrencies on licensed platforms, a significant change from previous policies that limited trading to investors with portfolios worth over HK$8 million (around $1 million). The regulations also aim to protect retail investors from market manipulation by setting stringent token standards and enforcing comprehensive disclosure and onboarding processes.
The city’s amenable environment has attracted multiple cryptocurrency businesses, further fueling the industry’s growth in the region. In line with this development, the Beijing government has shown increased interest in Web3, releasing a whitepaper and action plan to boost its development in the city.
The crypto community sees Hong Kong as a bellwether for broader cryptocurrency adoption in mainland China, which banned crypto in 2017. Huobi is actively participating in the development of Hong Kong’s Web3 ecosystem, contributing to the city’s first Web3 ecosystem fund, applying for a cryptocurrency trading license, and becoming the first member of the Hong Kong Virtual Assets Consortium (HKVAC).
The HKVAC aims to enhance the security risk management capabilities of the cryptocurrency industry and establish Hong Kong as a regional hub for virtual assets and digital finance. Huobi plans to remain a key player in the advancement of Hong Kong’s Web3 hub by serving as a reference for the organization, and sharing its expertise in security technology along with compliant, standardized processes.
Despite the positive developments, concerns remain around the increasing influence of the Chinese government in Hong Kong’s regulatory sphere. Some argue that this might lead to unfavorable conditions for businesses and citizens alike if the government decides to exert more control over cryptocurrency companies and trading activities.
Nonetheless, the commitment of both Hong Kong and mainland China to foster the growth of decentralized systems and blockchain-based solutions presents an exciting prospect for the global crypto-sphere. As the landscape continues to evolve, it remains crucial for the industry to find a balance between innovation and regulatory compliance.
Source: Decrypt
