On February 20, crypto exchange Huobi revealed its plans to shift Asia’s headquarters from Singapore to Hong Kong. This move comes after Hong Kong’s Securities and Future Trading Commission (SFC) proposed a new licensing regime allowing crypto exchanges to serve retail investors with large-cap coins.
The recent FTX downfall last November worsened the crypto market situation leading many crypto companies to shut down their platforms. And as the FTX saga was the second collapse after the TerraLuna fiasco in May 2022, it alerted global regulators, implying stricter crypto regulations to prevent a repeat.
Meanwhile, Hong Kong’s regulators took a step forward to make the country a crypto hub by introducing crypto-friendly policies. That’s why crypto companies are lined up to win approval from SFC to capitalize on the positive regulatory move of the regime.
Justin Sun, founder of the Tron (TRX) cryptocurrency and advisor at the Huobi exchange, added in a statement:
These three years, Hong Kong’s regulatory framework has seen a lot of change for the better, so I am very confident in the future of crypto compliance in Asia, Hong Kong and hopefully China,
Huobi To Establish A New Platform In Hong Kong
Huobi also plans to establish a new crypto exchange in the city to be named Houbi Hong Kong. The platform’s primary goal will be to scale up its trading services for institutional investors and high-net-worth individuals. Justin Sun is confident about getting approval in the Chinese special administrative region, as Huobi applied for the license last year too. But it failed to meet the stricter regulations requirements of that time, and only two firms managed to get approvals.
While speaking at an interview with Nikkei Asia, Sun highlighted that Huobi could increase its employee count from 50 to 200 for its Hong Kong-based subsidiary. He cited newly proposed crypto-friendly policies as the only reason behind this move.
Notably, Huobi announced a 20% workforce cut in January as part of the company’s efforts to adjust the platform’s infrastructure in line with the current market situation. Mainly, the company decreased its employee count after Justin Sun took control of the platform in October.
While pointing to the “recent turmoil”, Julia Leung, CEO at SFC, highlighted the downfall of giant players like FTX. She pressed the need for transparency in the crypto ecosystem and investor protection as the top priority.
In light of the recent turmoil and the collapse of some leading crypto trading platforms around the world, there is clear consensus among regulators globally for regulation in the virtual asset space to ensure investors are adequately protected and key risks are effectively managed.