October 25, 2023 at 11:14 GMTModified date: October 25, 2023 at 11:14 GMT
October 25, 2023 at 11:14 GMT

Binance sets up trading platform, hoping for crypto licence in Hong Kong

Binance has reportedly set up a trading platform in Hong Kong, as revealed by South China Morning Post (SCMP).

Binance has reportedly set up a trading platform in Hong Kong, as revealed by South China Morning Post (SCMP).

The exchange is said to be behind a newly established cryptocurrency trading platform in the city called HKVAEX. It took its reins in December 2022 and launched its trading platform in February 2023. According to three sources familiar with the matter, the platform was set up by Binance to pursue a crypto licence in Hong Kong.

While HKVAEX was created as a separate entity in the city under the company BX Services Limited, it shares resources with Binance. The former’s website also shows that it is utilising Binance servers for fetching content.

However, HKVAEX has told SCMP that it is an independent platform operated by its own team. It is currently preparing to apply for a licence in order to operate as a crypto trading platform in Hong Kong. Binance has also revealed that HKVAEX is not in the Binance Group of companies.

Over the recent years, Hong Kong has tried to position itself as a major player in the crypto industry launching several schemes to facilitate the same. According to the latest Worldwide Crypto Readiness Report, it continues to stand on top in the list of the most ‘crypto-ready’ locations for two years in a row. This year, it secured a score of 8.6, compared with the US at 7.7 and Switzerland at 7.5.

In crafting this list, the report looked into a multitude of data like the number of crypto ATMs, the legislation and taxes surrounding cryptocurrencies, the number of blockchain startups and the countries with the highest level of interest in crypto and so on.

Talking about the island nation, it said: “The country can be crowned the most crypto-ready as it ranks in the top three for three of the categories we looked at, including the number of blockchain startups per 100,00 people and the number of crypto ATMs proportional to the population. Thanks to its small land area, the city-state has the smallest area per crypto ATM. Hong Kong also doesn’t tax capital gains on crypto, making it appealing to investors.”

While Binance has not explicitly shown its interest in acquiring a licence in the city, it has often been tagged in news hinting the same. Back in March, Nikkei Asia reported that the crypto exchange was hiring officials that it will need in order to apply for a licence to offer services in Hong Kong.

As revealed by people familiar with the company, Binance had already hired a “responsible officer”, an individual licensed by the Securities and Futures Commission (SFC) and was also looking for a government relations director to focus on the city.

Outside of Hong Kong, Binance continues to face regulatory hurdles, particularly in the United States. The exchange, along with its CEO Changpeng ‘CZ’ Zhao and Binance.US, was hit with a lawsuit from the US Securities and Exchange Commission (SEC) in June. It alleged that they illegally listed unregistered securities in the form of several cryptocurrencies for trading and investment by US investors.

Recently, the exchange filed a motion for the dismissal of the charges brought against them by the US regulatory watchdog. The filing put forth arguments from Binance Holdings and CZ saying that the SEC has “overstepped its authority” in pushing the lawsuit.