Yet another cryptocurrency exchange is considering stepping foot into Hong Kong's crypto market.
As Hong Kong endeavors to become a prominent cryptocurrency hub, the Australian crypto exchange Independent Reserve is exploring the possibility of expanding its operations into the city.
On February 20th, Hong Kong's Securities and Futures Commission (SFC) introduced a proposed licensing scheme for digital currency exchanges to bolster the city's aspirations of emerging as a leading crypto destination in Asia. The regulatory changes are scheduled to be implemented in June.
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In light of the proposed regulations, Independent Reserve's co-founder and CEO, Adrian Przelozny, claimed that the favorable licensing climate in Hong Kong positions the city as an appealing option for opening a new base.
Przelozny emphasized the attractiveness of Hong Kong, explaining that the recent regulatory announcement makes the city a desirable location.
We view Hong Kong as an excellent opportunity for Independent Reserve and are actively scouting for new markets in Asia to grow our business.
If Independent Reserve decides to enter the Hong Kong market, it would follow in the footsteps of rival crypto exchanges Huobi and OKX.
The upcoming licensing requirements indicate that crypto companies operating in Hong Kong must adhere to a range of regulations, including those related to asset protection, Anti-Money Laundering (AML), Know Your Customer (KYC), and counter-terrorism financing initiatives. Furthermore, the regulations necessitate conflict of interest disclosures and periodic audits.
To evaluate the feasibility of extending their operations to Hong Kong, Przelozny disclosed that his team plans to visit the city next week. During the visit, the company is set to consult with banks, regulatory bodies, legal advisors, and compliance specialists.
In terms of the political relationship between Hong Kong and China, Przelozny speculated that China is monitoring the impact of a more liberal cryptocurrency climate in Hong Kong, which could potentially lead to the adoption of similar policies in China.
The Chinese government is leveraging Hong Kong as a testing ground to assess the potential effects of a relaxed cryptocurrency policy on the region's business environment. If the results are positive, it's likely that China will consider implementing similar measures and relaxing their current restrictions.
Echoing these sentiments, Tron CEO Justin Sun shared a similar viewpoint during a December interview with Bloomberg. Sun stated that China has treated Hong Kong as an "experimental base" to help determine its future policy decisions.