Huobi HK Expands Crypto Services in Hong Kong, Seeks Virtual Asset Exchange License

Huobi HK Expands Crypto Services in Hong Kong, Pursues Virtual Asset Exchange License and Faces Regulatory Challenges

Huobi HK, the Hong Kong division of the global trading platform, has announced its plans to offer spot and managed services to both business and retail clients in the region. The exchange has formally applied for a virtual asset exchange license from the Hong Kong Securities Regulatory Commission. Huobi HK aims to enhance its security procedures over the next six months and improve its anti-money laundering measures and compliance practices to meet local regulations.

The decision to expand its crypto offerings in Hong Kong comes after Huobi's parent company faced regulatory issues in Malaysia. The Malaysian Securities Commission ordered Huobi Global to halt operations due to its lack of a Recognised Market Operator license, emphasizing the need to adhere to regional laws and protect investors. Huobi Malaysia was also prohibited from advertising in the country and had to block user access to its apps on digital platforms.

Meanwhile, Hong Kong is implementing new rules starting from June 1, establishing a licensing system for companies providing virtual asset services. This indicates a welcoming approach towards cryptocurrency businesses in the region while implementing specific local laws to ensure investor protection. The Chief of the Hong Kong Monetary Authority, Eddie Yue, previously expressed openness to cryptocurrency businesses but emphasized that strict rules would still apply.

Obtaining a virtual asset provider license in Hong Kong is expected to be a challenging task, with stringent requirements such as examination of listed tokens and the absence of market-making activities. Cryptocurrency exchanges will also need comprehensive insurance coverage.

Reports have suggested that Justin Sun, the CEO of TRON, intends to relocate Huobi's Asia headquarters from Singapore to Hong Kong. Additionally, Huobi plans to expand its operations in Hong Kong, with a potential increase in staff from 50 to 200 by the end of the year.

Recent data has shown that Huobi's market share has grown, gaining 8% of the volume lost by top exchanges like Binance to Asian players. Huobi Global currently ranks twelfth in terms of volume, with a daily trading volume of approximately $400 million. 

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