Faced with repressive attacks by US regulators on cryptocurrency exchanges, Hong Kong has officially invited Coinbase to come to its territory. Should we expect an exodus from major American crypto exchanges to Hong Kong?
Hong Kong eyes US exchanges
This is the hot topic that has been driving the cryptocurrency ecosystem for a week. The SEC, the US securities regulator, is waging a crackdown on major players in the crypto industry. The first to have paid the price are the two main exchanges, Binance and Coinbase, accused of securities fraud.
🔴 LIVE – Follow the SEC’s anti-cryptocurrency crusade in real time
In addition to the economic and political issues raised by this regulatory fight orchestrated by the SEC, the supremacy of the United States over the crypto industry is at stake. In a context of regulatory raceled by Europe through MiCA and neglected by the United States, an outsider is starting to pull out of the game: Hong Kong.
In this context, Coinbase was invited by Hong Kong to come and settle in its territory in order to take advantage of clear, defined and voluntarily flexible legislation. Specifically, this proposal was made by Johnny Ng Kit-chong, an active politician and member of the Legislative Council of the Chinese administrative region:
I hereby offer an invitation to welcome all global virtual asset trading operators including @coinbase to come to HK for application of official trading platforms and further development plans. Please feel free to approach me and I am happy to provide any assistance. pic.twitter.com/bcIi1IjMlc
— Johnny Ng 吴杰庄 (@Johnny_nkc) June 10, 2023
For those who don’t speak English, understand: “I hereby invite all global digital asset exchange operators, including Coinbase, to come to Hong Kong to register as official exchanges and continue their development plans. »
As we mentioned last week on Cryptoast, it is very likely that these attacks by the American regulator will lead to an exodus of the country’s main players to jurisdictions with clearer and more defined regulations. Last April, during the SEC’s first offensive, Coinbase had previously threatened the US to flee to Europe or the UK. The subject is now revived with Hong Kong entering the dance.
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Hong Kong, future global crypto hub?
Since October 2022, Hong Kong – and by extension, China – has made a completely unexpected change of course to open up again to the cryptocurrency sector. As a reminder, China decided to turn its back on cryptocurrencies in 2017. Despite an independent status, the island of Hong Kong had to comply with Chinese regulations.
Now, Hong Kong’s ambition is to catch up and recover its status as a global economic and cryptocurrency hub. In a few months, the autonomous region has made a lot of progress: construction of a regulatory framework and a specific license to attract trading platformsno taxation on cryptocurrency trading, etc.
Several cryptocurrency companies (including Huobi, Gate Group, Amber Group, OKX and BitMEX) have already expressed their intention to apply for a license in Hong Kong. Nevertheless, the dynamic does not seem very optimistic and only 10 companies actually converted their license to offer cryptocurrencies to Hong Kong customers.
This is certainly the reason why Hong Kong shifts into high gear and directly engages major players in the cryptocurrency industry. A strategy that could make some think, especially if the repression of the American regulator continues.
👉 To learn more, find our article – Hong Kong and China: the next global cryptocurrency hub?
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Lilian Aliaga
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