Summary:
- Huobi Global applied for a crypto license in Hong Kong amid a regulatory shift from the region’s watchdog.
- Justin Sun’s company will also open a local affiliated names Huobi Hong Kong, the crypto billionaire announced via Twitter
- The announcement coincided with a regulatory turnaround from Hong Kong’s securities watchdog aimed at lifting the ban on retail crypto trading and implanting a licensing regime.
Huobi Global applied for a crypto trading license in Hong Kong as the digital asset exchange moves to strengthen its foothold in the Asian market and expand its business.
Crypto billionaire Justin Sun, an advisor for the crypto exchange, said the major platform will also open a local subsidiary named Huobi Hong Kong. Sun tweeted on Monday that the new exchange will focus on servicing “institutional investors and high net worth individuals” in Hong Kong.
The announcement follows the separation of Huobi Korea from its parent entity, Huobi Global.
Huobi Taps Hong Kong’s Crypto Comeback
Indeed, Huobi’s move to capture a crypto trading license in the jurisdiction came at a time when local regulators were reassessing existing policies to incentivize digital asset ecosystem growth. The announcement from Sun and crypto exchange Huobi coincided with a shift in the Securities and Futures Commission’s (SFC) approach to cryptocurrencies and retail investment.
On Monday, the SFC revealed that it was considering lifting the ban on retail crypto trading in its proposed rules for digital asset platforms. This would allow regulated platforms under the new licensing regime to service retail customers and investors in the region.
Crypto service providers would be allowed to offer “eligible large-cap virtual assets” like Bitcoin (BTC) and Ether (ETH) that are listed on two “acceptable indices”. These indices must also be issued by at least two independent index providers, the SFC said.
The SFC also proposed liquidity checks on crypto exchange reserves to ensure that assets are fully backed and client risk is managed. Also, the regulator proposed that platforms operate a token review committee to conduct due diligence on digital assets and monitor any changes in the token’s underlying technology such as hard forks.
Hong Kong’s regulator expressed consideration for crypto derivative products and custom policies for the derivatives industry as well, per the consultation paper.
According to Monday’s announcement, the SFC will implement its licensing regime on June 1, 2023. The region also plans to standardize the stablecoin landscape by June this year. Consultation for the proposed measures will run until March 31, 2023.
Huobi’s plans to secure a license from Hong Kong’s regulator could position the crypto exchange as an authority in the market and push users to leverage the platform.
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