Huobi HK, a subsidiary of digital asset exchange Huobi Global, announced that it now offers cryptocurrency spot trading services to both individual and institutional clients in Hong Kong.
The exchange took an important step by submitting an application notice to the Hong Kong Securities and Futures Commission on May 29. The move is in line with regulatory requirements, as cryptocurrency companies must obtain a virtual asset exchange license before offering regulated services.
Earlier in February, Justin Sun said Huobi had applied for a license to provide cryptocurrency trading services in Hong Kong as the Chinese territory pushes to become a hub for digital assets.
In a major change, the crypto entrepreneur also revealed that Huobi’s Asian headquarters will move from Singapore to Hong Kong. The founder of blockchain network TRON explained that the project involves launching a new exchange in Hong Kong, aptly named Huobi Hong Kong.
But Sun said at the time that the new exchange would initially target high net worth individuals and institutions, offering a “trusted and secure platform” for wealthy Asian investors to invest in digital assets.
The move also comes just a week after Hong Kong regulators revealed plans to allow licensed cryptocurrency platforms for retail investors under a new regulatory framework for the sector.
The proposed guidelines include various aspects such as asset custody safety requirements, cybersecurity standards and segregation of customer assets. This will take effect from June 1st, coinciding with the launch of the new licensing regime for the virtual asset platform.
Nevertheless, the SFC will continue to ban trading of stablecoins by individual traders until new regulatory action is taken against these assets. The decision came after the SFC completed its consultation paper on regulating cryptocurrency activities, highlighting the need to focus on stablecoins and the risks associated with their regulation.
Regulators said they want to ensure that stablecoin reserves are properly managed to maintain price stability and protect the redemption ability of investors. It emphasizes that these risks can have a significant impact on the stability of stablecoins if not managed effectively.
The move toward more crypto-friendly regulation is part of Hong Kong’s efforts to regain its status as a major financial center following the pandemic and political unrest in Hong Kong. While China’s official stance on cryptocurrencies, which remain heavily restricted on the mainland, remains unchanged, there are signs that the Chinese government is backing Hong Kong’s push to become a major hub for digital assets.