Cryptocurrency exchange platform Huobi has announced the launch of Huobi HK, an initiative that aims to provide cryptocurrency trading services to users in Hong Kong.
According to the announcement on May 29, the platform aims to provide cryptocurrency trading services to users in Hong Kong, facilitating the buying, selling, and holding of mainstream cryptocurrencies such as bitcoin (BTC) and ethereum (ETH), along with other major cryptocurrencies listed on the independent index.
Hong Kong’s crypto-friendly policies and impending regulations
With Hong Kong gradually implementing crypto-friendly policies since last year, the recent announcement of impending “crypto regulations” has further propelled the region’s development as a cryptocurrency center.
The Hong Kong Securities and Futures Commission (SFC) has disclosed that additional details regarding virtual asset trading regulations will be unveiled from June 1. This will pave way for retail investors to potentially trade digital assets on licensed platforms by the latter half of 2023.
However, despite the imminent implementation of the new regulatory framework in just a few days, the SFC still needs to approve any firm to service retail investors.
The regulator has stated that most existing cryptocurrency exchanges accessible to the public are not regulated by the SFC, underscoring the need for compliance with the new guidelines or ceasing operations in Hong Kong for firms unwilling to comply.
Several businesses have raised concerns regarding the costs associated with obtaining and maintaining licenses, as well as the potential profitability of establishing operations in Hong Kong.
The proposed rules for centralized exchanges and retail trading have been criticized as overly conservative, limiting trade to highly liquid and established cryptocurrencies like bitcoin and ether.
Furthermore, it remains to be seen whether exchanges will be limited to serving only residents, a relatively small market, while the securities regulator finalizes the guidelines.
More crypto exchanges flock to Hong Kong
Huobi, which has been actively involved in the development and construction of Hong Kong’s web3 ecosystem, aims to open the Hong Kong market in a compliant and regulated manner to expedite the growth of the region’s web3 ecosystem.
A representative from Huobi emphasized the importance of regulating web3 in Hong Kong, believing it would foster the widespread adoption of cryptocurrencies globally.
While Hong Kong strives to solidify its position as a major crypto hub, other Asian countries have taken a stricter stance on cryptocurrency firms. Huobi, for instance, faced an order from Malaysian authorities to cease operations in the country due to its lack of registration.