Recent reports, Hong Kong has been recording a massive influx of crypto exchanges from across the world. Crypto analysts revealed that the relatively friendly crypto regulations and business environment account for the huge turnouts.
According to the reports, the renewed interest Hong Kong showed in embracing blockchain technology products has kindled a fresh wave of excitement among crypto platforms globally. In addition, many crypto startups are contending to take part in the state’s dynamic market offers.
Notably, the Huobi exchange was one of the giant crypto platforms that recently showed interest in the thriving Hong Kong market. On May 26, the exchange revealed its plans to launch a trading platform in the city, providing trading services for digital assets like Bitcoin and Ethereum.
The exchange believed the active crypto regulations in the Hong Kong market are pivotal to boosting the development of the Web3 industry in the city. Hence, Huobi is reportedly determined to move into the market with full compliance with the regulations.
In addition, Gate Group, a Swiss business cooperation that owns Gate.io is also part of the startups moving to Hong Kong. According to the reports, the group recently opened Gate.HK in Hong Kong, for crypto trading services.
Similarly, Gate.HK is set to follow Huobi’s steps as it has filed to be licensed by the Securities and Futures Commission (SFC) in Hong Kong. Also on the list of interested firms is the Amber Group, a Singapore-based crypto financial services provider. The firm reportedly plans to shift its business focus to Hong Kong soon.
More Crypto Firms Shift Gaze Towards Hong Kong
Interestingly, world-leading crypto exchanges like OKX and BitMEX are not left behind the massive movement. According to the report, OKX is already operating in the region, offering crypto-related services to investors in Hong Kong. Meanwhile, BitMEX exchange on the other hand is just planning to open a branch in the region.
Also included in the list of interested firms is the financial tech branch of Greenland, the Chinese real estate developer. The firm is reportedly set to move into the trending Hong Kong market.
Meanwhile, to tame the rapidly growing crypto market, Hong Kong regulators are set to tighten the regulations on digital asset platforms. The approved regulations would reportedly take effect from June 1, 2023.
The new regulation has mandated every crypto platform that wants to operate in Hong Kong to first apply for an operation license. Fines and imprisonment are the possible consequences of operating without a license.
Furthermore, speculators believed the regulations would give room for retail trading of crypto assets to thrive again after a challenging year for the industry, following the bankruptcy of the FTX crypto exchange which rock the whole crypto industry heavily.
Startups See Hong Kong As Gold Rush For Crypro Businesses
Markus Thielen, the chief researcher at Matrixport, a financial research firm, recently observed that Hong Kong has many rich business moguls and wealthy family businesses that can conveniently fund crypto startups. Hence, encouraging the massive influx.
Thielen continued that with the appropriate government and financial agency’s permission, Hong Kong can still regain its position as the top leading digital assets hub in Asia. He added that the region offers the most business-friendly and convenient environment.
The chief continued that the region is now a gold rush for crypto platforms globally. He said they contend to offer crypto-related services to retail investors in the city, who are mostly interested in high-volatility products like derivative contracts.
Thielen pointed out that with over 100 native billionaires, Hong Kong has sufficient well-funded business owners that can conveniently accommodate and support the high numbers of crypto startups flooding into the city.
Matter Greco, an analyst at Fineqia, recently observed that the effective crypto regulatory approach of Hong Kong offers a cooperative and friendly environment for crypto businesses to thrive. He said the region encourages crypto growth better than China and US which are mired with harsh crypto regulations.
However, Hong Kong is not as perfect as it seems, according to Greco. For instance, some Hong Kong banks previously declined crypto platforms’ applications to open local bank accounts.