What curious timing! Just as the Hong Kong government cracks down on crypto exchanges, the Hong-Kong based crypto wallets and payments platform, Crypto.com, announced a new one, together with a scary-sounding, token-fundraising platform called "The Syndicate." 

But never fear: “We expect [the government] to warm up over time," Crypto.com’s CEO Kris Marszalek tells Decrypt.

Under new legislation, exchanges trading securities must register with Hong Kong authorities. Hong Kong's SFC has already said that bitcoin is not a security, but the implications of the ruling could be murky for he rest of Crypto.com's initial pairings— ETH, XRP, LTC, EOS, XLM, CRO, MCO and USDT. Recently, the United States SEC took the creators of Block.One to court on the grounds that it counted as a security, and it’s not unreasonable to assume the SFC might swing the same way. 

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Undeterred, the exchange is accepting signups for a closed beta that starts on Monday, ahead of a public launch set for early December, and has launched a crypto fundraising platform called “The Syndicate,” that will list token offerings. Marszalek says the new regulation is pretty much a non-issue: "On a global scale, it won’t have much impact on the market," he says. 

Crypto.com’s 1 million customers might be willing to wade through regulatory uncertainty. And for institutional clients, Crypto.com is "offering access to our retail flow, fast APIs and fees that are lower than what they currently pay,” claims Marszalek.

Indeed, stake enough CRO ( Crypto.com’s coin) and the exchange will waive trading fees entirely, and offer staking rewards of up to 20 percent per year. To reach the 100 percent discount, you’ll have to stake $1.7 million worth of CRO; at today’s prices, that’s around 10 percent of the coin’s daily volume.

Without staking, fees reduce to 0.04 percent maker fees and 0.1 percent taker fees for monthly trading volumes of over $10 million—meaning that, to make it worth your while, you'd have to trade over $40 million per month (whilst staking $1.7 million CRO) for Crypto.com to waive fees entirely.

Staking CRO comes with other benefits. On the Syndicate's platform, CRO holders can jump to the head of the line for new token allocation, and can buy newly listed coins at up to a 50 percent discount. 

“We will not be charging any listing fees and all proceeds from the event will go back to the project, turning this into a fundraising event for them,” CEO Kris Marszalek tells Decrypt.  

Marszalek says its products, such as the Crypto.com coin, encourage loyalty among its following, most of whom joined Crypto.com in 2019—likely the result of the launch of its credit and payments products, as well as a new trading engine.

Marszalek is banking on that new and growing userbase; other crypto exchanges, such as Bitpanda.com, struggled at launch due to a lack of marketing and low volume. “We already have a large and growing userbase, and customer acquisition is a problem that we solved before the decision to launch an exchange,” says Marszalek.