Hong Kong has opened its doors to global virtual asset trading operators, including crypto exchange Coinbase, following the acceptance of applications for crypto trading platform licenses by the region’s Securities and Futures Commission (SFC) as of June 1. The move comes amid increased scrutiny on cryptocurrency exchanges in the United States and elsewhere.
Crypto firms granted licenses in Hong Kong will be able to cater to retail customers and must comply with regulations prohibiting practices such as airdrops. Hong Kong legislative council member Johnny Ng extended a formal invitation to crypto exchanges, via a Tweet, encouraging them to apply for official trading platforms.
Coinbase, in response, expressed its commitment to partnering with high-bar regulators both in the US and other jurisdictions. This comes on the heels of several lawsuits against exchanges like Binance and Coinbase, filed by the US Securities and Exchange Commission (SEC), for allegedly violating federal securities laws.
The lack of regulatory clarity surrounding cryptocurrencies in the US has led Coinbase’s CEO, Brian Armstrong, to consider moving the company out of the country. Expanding globally, Coinbase is in the process of establishing itself in Abu Dhabi, Canada, and Singapore. While the company has been operating under CB Payments Limited in the UK—with authorization and regulation from the Financial Conduct Authority—the firm aims to apply for authorization under the UK’s incoming crypto regime.
Despite significant efforts to expand overseas, Coinbase is not willing to abandon the US. According to Tom Duff-Gordon, Vice President of International Policy at Coinbase, the company intends to stay and fight for regulatory clarity in the US, representing the best interests of the industry. This decision reflects Coinbase’s dedication to working closely with regulators, ensuring compliance, and fostering a favorable environment for virtual asset trading.
While the invitation from Hong Kong’s SFC aims to bolster the region’s status as a hub for crypto trading, it raises questions about the future of cryptocurrency regulations across different countries. It’s clear that finding the balance between innovation and regulation remains a challenge, both for exchanges such as Coinbase and for government agencies seeking to protect investors.
As crypto exchanges like Coinbase navigate the complex regulatory landscape of various jurisdictions, the need for clear guidelines becomes more pressing—both for the sake of the businesses and the customers they serve.
Source: Coindesk
