The trend of prominent cryptocurrency companies seeking to establish a foothold in Hong Kong is on the rise, primarily due to the upcoming implementation of new regulations on virtual and digital tokens in June.
These regulations are expected to transform Hong Kong into a thriving cryptocurrency hub. OKX, the world’s second-leading crypto exchange by trading capacity, recently revealed its intentions to establish a branch in Hong Kong.
As per the press release on Tuesday, OKX has formed a new entity in Hong Kong, intending to provide digital token services. The company is applying for a digital and virtual token service provider permit under the Counter-Terrorism Financing and Anti-Money Laundering Ordinance 2022, scheduled to come into effect in June this year.
OKX’s decision to launch a branch in Hong Kong comes after more than a year of practice to ensure that the company meets the regulatory needs in regions such as security, compliance, product, and organization; over the past few years, Hong Kong has become an increasingly important hub for the cryptocurrency industry, with evolving regulatory frameworks that have attracted a range of entrepreneurs, top talent, and innovative companies, including OKX.
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The General Counsel at OKX, Bing Zhao, expressed the company’s ambitious vision to obtain permits in relevant and suitable jurisdictions and their commitment to collaborating with the Securities and Futures Commission during the license application procedure.
OKX is dedicated to maintaining high standards in custody, security, compliance, and anti-money laundering and is eager to showcase how they can exceed the rigorous expectations of digital and virtual token service providers following the regulatory regime, Zhao added.
The Director of universal Institutional at OKX, Lennix Lai, highlighted the significance of governance and regulation for the long-term achievement of the Web3 and cryptocurrency industry. He emphasized that OKX recognizes the tremendous ability of Hong Kong and is committed to investing in local talent and partnering with authorities over the future years to foster the growth of the ecosystem in the region.
Lennix Lai further noted that the new digital and virtual token service provider regime introduced by the Hong Kong administration has established a solid regulatory ecosystem and created ideal conditions for the region to emerge as a global leader in the crypto sector. He expressed his excitement about registering for the relevant permits through the newly established region entity of OKX.
Hong Kong Embraces Crypto
In October 2022, reports emerged that Hong Kong contemplated legalizing crypto trading and allowing retail users to transact digital tokens. Soon after, there was an official approval that the Securities and Futures Commission financial authority was considering granting permission for trading digital and virtual token exchange-traded funds.
Recently, SEBA Bank, a banking entity known for its crypto-friendly approach, announced the launch of the Hong Kong post, signaling its intention to expand its operations in the Asia-Pacific region. In February, a notable development occurred when the Securities and Futures Commission verified the October announcement regarding the potential for retail crypto trading.
The commission initiated a discussion on this matter over a month and recently announced its plan to regulate the sector starting in June. Based on the most recent news from last week, it has been reported that more than eighty companies are in queue to become a part of the growing Web3 ecosystem emerging in the region.