OKX, a Seychelles-based crypto exchange ranked among the top 20 exchanges of the world, becomes the latest to enter Hong Kong due to its crypto-friendly regulations. Other crypto firms that previously revealed plans to set up a base in the city include Australian crypto exchange Independent Reserve and Huobi.
Global crypto companies are rushing to Hong Kong following the city showed a desire to become a financial hub for Asia. The new regulations provide full authorization to crypto services platforms to serve retail customers. Similarly, to support its goal of becoming a key player in the industry, Hong Kong regulators proposed a Virtual Assets Service Provider licensing (VASP) regime, set to take effect on June 1, 2023.
Crypto firms willing to operate in the regime must win a license from the authority before providing services. So far, nearly 80 blockchain companies have hinted interest in capitalizing on Hong Kong’s positive regulations.
OKX seeks a VASP license under Anti Money Laundering and Counter-Terrorist Financing (Amendment) Ordinance 2022. The platform will also apply for “Type 1 and 7” licenses under the Securities and Futures Ordinance.
According to the Securities and Futures Commission (SFC), a Type 1 license is the legal approval for managing securities, while Type 7 allows a crypto firm to provide automated trading services.
OKX Is Prepared To Comply With Hong Kong’s Regulatory
Speaking at the platform’s move to expand its presence in Hong Kong, General Counsel at OKX, Bing Zhao added;
OKX has an ambitious vision when it comes to pursuing licenses in relevant and appropriate jurisdictions, and we are committed to working with the SFC throughout the application process. We take security, custody, AML, and compliance very seriously and are keen to demonstrate how we can meet and exceed the robust standards expected of virtual asset service providers under this regulatory regime.
OKX revealed in a press release on March 28 that the exchange’s move to enter Hong Kong comes after the platform has been preparing to meet the regulatory requirements for over a year. The platform also affirmed in the announcement that it is sponsoring two upcoming industry events in the city, the Hong Kong Web3 festival and the Woo Summit.
Banks from China, a country that once banned using crypto assets with threatening financial platforms not to facilitate crypto activities, also showed interest in exploring cryptocurrencies in Hong Kong.
It further supports the city’s ambitions to secure its place as a financial hub, allowing investors to trade crypto assets with large capitals. According to the report, the Bank of Communication Co., Shangai Pudong Development Bank, and Bank of China Ltd are among the entities intended to provide services.
Hong Kong also allocated HK $50 million (US $6.7 million) to support its Web3 developments. The funds will be used to build workshops in the field, conduct international seminars, and support cross-sectoral integrations, among other things, affirmed Financial Secretary Paul Chan in the annual budget speech 2023-2024. Chan also expressed his plans to establish and lead a task force supporting the sector’s growth.
Featured image from Pixabay and chart from TradingView.com
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Jammy is a veteran writer in the cryptocurrency industry, with over a decade’s experience covering the latest trends and developments in the market. A recognized expert in the field, Jammy has contributed to some of the world’s leading publications, providing insightful analysis and in-depth coverage of the most important issues facing the crypto world today. With a keen understanding of blockchain technology and its potential applications, Jammy is committed to educating readers about decentralized finance’s power and its transformative impact on the global financial system. Whether discussing the latest token offerings or exploring the potential of decentralized exchanges, Jammy brings a wealth of knowledge and expertise to every article.