China-based cryptocurrency exchanges Huobi Global and OKX have revealed their plans to apply for licences in Hong Kong considering upcoming regulations.
As part of a new regulatory package that will be implemented in June 2023, these two exchanges will be able to operate in Hong Kong after they become registered with the Hong Kong Securities and Futures Commission (SFC). The new rules are in line with the city’s vision of becoming a virtual asset hub. According to en.pingwest.com, Huobi representatives also revealed their intention to open a new Huobi Hong Kong exchange that will work mostly with institutions and high-net-worth individuals.
The new Hong Kong-based Huobi exchange aims to position Huobi as a trusted and secure platform for larger investors in Asia who are looking to enter the crypto market. According to fxstreet.com, the announcement caused a significant rally in the exchange’s native token Huobi Token (HT), as its price went up by 16.5% since 20 February 2023. Huobi announced in January 2023 that its ongoing restructuring process would involve letting go of 20% of its workforce. The company also wants to shut down its Huobi Cloud Wallet in May 2023.
As for OKX, company officials revealed that the exchange had begun preparatory work for a licence application in Hong Kong in 2022. Data from CoinGecko indicates that Huobi and OKX are the ninth and eleventh largest cryptocurrency exchanges in the world by monthly visits, respectively.
In February 2023, the Hong Kong Monetary Authority has revealed its intention to introduce new regulations on stablecoins and crypto assets. The HKMA is currently analysing the pros and cons of introducing new regulations or amending existing stablecoin laws. The HKMA issued a discussion paper on crypto-assets and stablecoins on 12 January 2022, and the paper eventually received 58 responses from public bodies, business and professional organisations, as well as individuals.
These responses indicate that the public is not opposed to regulating stablecoins with a risk-based and agile approach that can adapt to evolving market conditions. Respondents pinpointed the need to consider market developments while gaining reference from the discussion of international regulatory bodies when developing the new regulatory regime.
The Hong Kong Monetary Authority has revealed plans to regulate the establishment and maintenance of the rules governing an in-scope stablecoin arrangement, as well as the issuance, creation or destruction of an in-scope stablecoin.
The paper summary included information on key regulatory principles such as regulatory requirements that will be developed in areas such as ownership, governance and management, financial resources requirements, user protection anti-money laundering and counter-terrorist financing, risk management, and disclosure requirements.
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