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Crypto exchange Huobi is expanding its offering in Hong Kong, with its local subsidiary Huobi HK now offering crypto trading services to Hong Kong clients.
Following its intention of making an application for a virtual asset exchange license from the Hong Kong Securities and Futures Commission, Huobi HK is now offering crypto spot trading and virtual asset custody in Hong Kong. The exchange will work with independent auditors to meet the regulator’s compliance and AML requirements, Huobi HK announced in a tweet.
The move forms part of a broader shift eastwards by crypto firms, as Asia becomes an increasingly accommodating regulatory environment. "Regulation of Web3 in Hong Kong will contribute to the widespread adoption of cryptocurrencies on a global scale,” said a spokesperson for Huobi in a prepared statement.
A Special Administrative Region controlled by China, Hong Kong recently introduced a regulatory framework for crypto exchanges, which comes into force on June 1. Under the new regulations, retail investors in Hong Kong will be able to trade cryptocurrency on licensed platforms, removing restrictions that previously limited trading to investors with portfolios over HK$8 million (roughly $1 million).
The new regulations require virtual asset trading platforms to include "suitable" onboarding processes, disclosures, with tokens having to pass a “minimum criteria” to ensure that "retail investors should be less prone to market manipulation."
Crypto’s eastward shift
Hong Kong’s welcoming environment is already attracting interest from crypto firms. The Greater China division of coworking provider WeWork recently reported that it’s already seen 40 to 50 applications enquiries from crypto businesses looking to set up shop in Hong Kong in recent months.
The move by Hong Kong is seen as a bellwether for wider crypto adoption in mainland China, which effectively banned crypto in 2017. On the heels of Hong Kong’s new digital asset regulations, the local government in Beijing recently released a Web3 whitepaper and work plan to boost Web3 development in the city.
It is indeed fascinating to witness the Beijing government's recent focus on Web 3.0, particularly considering the imminent June 1st developments in Hong Kong. China🇨🇳's commitment to embracing Web 3.0 technology reflects a significant step towards recognizing the transformative… https://t.co/BLtn5qE2ef
— H.E. Justin Sun 孙宇晨 (@justinsuntron) May 28, 2023
In a tweet, Tron founder and Huobi global adviser Justin Sun drew comparisons between the two events, noting that, “It is indeed fascinating to witness the Beijing government's recent focus on Web 3.0, particularly considering the imminent June 1st developments in Hong Kong.” He added that it represents “a significant step towards recognizing the transformative potential of decentralized systems and blockchain-based solutions.”
Huobi is actively involved in the development of Hong Kong’s Web3 ecosystem; as well as applying for a cryptocurrency trading license in Hong Kong, it became a significant contributor to Hong Kong's first Web3 ecosystem fund during this year’s Hong Kong Web3 Carnival.
In a separate announcement, Huobi revealed that it has become the first member of the Hong Kong Virtual Assets Consortium (HKVAC), an organization dedicated to providing credit ratings for crypto asset exchanges and trading products. A collaboration between crypto industry players including exchanges, institutional investors, and Hong Kong-licensed rating agencies, HKVAC aims to boost the crypto industry’s security risk management capabilities, and assist the authorities in making Hong Kong a regional hub for virtual asset and digital finance.
As a founding member of HKVAC, Huobi will serve as a reference for the organization, leveraging its "expertise in security technology and its compliant, standardized processes," the exchange said.
HKVAC has also committed to creating a “safe, open and transparent environment” for crypto investments under Hong Kong’s new crypto regulations, and will promote the further acceptance and recognition of crypto assets in the region through public education.
A spokesperson for the exchange noted that Huobi, “will continue to collaborate with regulatory authorities in Hong Kong to support the development of a vibrant Web3 hub.”