Crypto Giants Absent as Hong Kong Attracts 24 Companies for Licenses

Twenty-Four companies have applied for licenses to operatedigital asset exchanges in Hong Kong, marking a move in the city's bid toestablish a regulated hub for the industry. Notable applicants include Bybit,OKX, and Crypto.com.

Hong Kong's Bid to Become a Crypto Hub

Among the list of applicants were Gate.io, HTX, and Bullish,each boasting notable trading volumes in the digital asset sphere. Theapplication process came with a deadline of February 29th, after whichplatforms failing to submit must cease operations by the end of May.

Notably absent from the applicant roster were industrygiants like Binance,Coinbase, and Kraken.Industry observers view the application pool as a litmus test for Hong Kong'sappeal as a digital-asset center, particularly amidst intensifying competitionfrom other jurisdictions. The city's nine-month-old virtual-asset regulatoryframework prioritizes investor protection, potentially introducing compliancecosts that could deter some businesses.

The application list is the litmus test for industrysentiment, said Angela Ang, the Senior Policy Adviser at Blockchain IntelligenceFirm TRM Labs. Its a good sign to see a number of well-known players in themix. What Hong Kong really needs is a number of committed, sizable players toanchor its ecosystem.

Ding Chen, the Head of Regulatory Affairs at Bullish,acknowledged the cost implications of operating a regulated business, drawingparallels with traditional financial services. Such considerations are factoredinto companies' overall strategies as they navigate Hong Kong's regulatory landscape.

Over-the-Counter Dominance: Crypto Flows Beyond DigitalExchanges

Hong Kong's pivot towards becoming a crypto hub in late 2022reflects an effort to project a cutting-edge image amid uncertainties about thecity's future. Presently, HashKey Exchange and OSL Group are the onlyauthorized digital-asset exchanges operating in Hong Kong.

UPDATE: #HongKong announces it will no longer accept license applications from #crypto exchanges as of Feb. 29. Noncompliant platforms will face imminent closure, marking a significant shift in the region's cryptocurrency regulatory landscape. #CryptoRegulation #HongKong pic.twitter.com/bVMmL17B1q

Gary Tiu, the Head of Regulatory Affairs at OSL, highlighted theevolving regulatory environment's impact on business construction andemphasized the need to assess associated costs.

Despite Hong Kong's allure as a crypto destination, datafrom Chainalysisindicates that a significant portion of crypto flows into the city occursthrough over-the-counter (OTC) trades rather than digital-asset exchanges.Regulators have initiated crackdowns on small shops facilitatingcash-to-digital asset exchanges, signaling efforts to streamline oversight.

HongKong is actively exploring regulations for stablecoins and consideringthe possibility of allowing exchange-traded funds investing directly in selectcryptocurrencies. In a recent development, the government sold $750 million ofdigital green bonds using HSBC Holdings' tokenization platform, furtherunderscoring the city's foray into digital finance.

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Coinbase Expands European Presence, Obtains Regulatory Approval in the Netherlands

<p>Digital asset services provider, Coinbase announced today that it has secured <a href="https://blog.coinbase.com/coinbase-gains-regulatory-approval-in-the-netherlands-e781efb750df" target="_blank">regulatory approval</a> in the Netherlands. The exchange has become the first major crypto trading services provider to register with the Dutch Central Bank.</p><p>According to the details shared by Coinbase, the latest registration has allowed the company to offer its crypto products and services in the Dutch market. Coinbase has a strong presence in Europe with dedicated hubs in Germany, Ireland and the United Kingdom.</p><p>The crypto firm noted that additional registrations and license applications are in process across major European markets. In July 2022, Coinbase received regulatory approval from Italian authorities.</p><p>“As part of Coinbase’s ambition to be the world’s most trusted and secure crypto platform, we have taken strides to work collaboratively with government, policymakers and regulators to shape the future in a responsible way. Coinbase prides itself on being a compliance-led business. The Netherlands is a critical international market for crypto, and I am really excited for Coinbase to bring the potential of the crypto economy to the market here,” said Nana Murugesan, the Vice President, International and Business Development at Coinbase.</p><p>European Region</p><p>Europe is among the fastest-growing crypto regions in the world. Countries like Italy, Spain and Germany are home to some of the leading crypto trading firms. Earlier this year, Binance obtained virtual asset services provider (VASP) <a href="https://www.financemagnates.com/cryptocurrency/news/binance-obtains-vasp-registration-in-spain/" target="_blank">registration in Spain</a>. In May this year, the crypto exchange received approval from <a href="https://www.financemagnates.com/cryptocurrency/regulation/binance-gets-green-light-from-italy-regulators/" target="_blank">Italian regulators</a>.</p><p>According to Glassnode, the BTC balance on Coinbase dropped by approximately 36% in two years.</p> This article was written by Bilal Jafar at www.financemagnates.com.

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BTC Markets, an Australian cryptocurrency exchange, has been granted a finance service licence.

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Coinbase gets Bermuda license, reportedly plans launch of offshore exchange

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Dubai crypto regulator suspends BitOasis crypto exchange license

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‘No other options’: Hong Kong moving forward with crypto licensing, FinTech chair says

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