Gate Group, the parent company of the Gate.io crypto exchange, becomes the latest to apply for a license in Hong Kong. The firm joins Huobi Global, OKX, and Bitget, seeking approval in the regime due to crypto-friendly policies. Gate.io decided Hong Kong’s financial secretary, Paul Chan, confirmed the allocation of $6.4 million for Web3 developments in its annual budget speech for 2023-2024.
Almost all jurisdictions have been restructuring their crypto regulation following the FTX aftermath. In this slew, many regulators have been introducing tougher crypto regulations, considering misappropriate management of crypto companies that recently filed for insolvency and caused investors to lose their funds, including FTX.
Meanwhile, Hong Kong welcomes worldwide crypto firms to settle in and make the city a crypto hub. Initially, Hong Kong proposed a new licensing regime allowing crypto exchanges to serve retail investors. The government has allocated 50 million Hong Kong dollars ($6.4 million) to expedite “the Web3 ecosystem development.”
Crypto companies are lining up to get the country’s Securities and Future Commission (SFC) approval and capitalize on regulators’ positive crypto stance.
Gate.io Pushes Hong Kong Closer To Milestone
While speaking at the budget speech, the financial secretary added:
Cyberport established the Web3 Hub@Cyberport early this year. I will allocate $50 million to expedite the Web3 ecosystem development by, among other things, organising major international seminars, to enable the industry and enterprises to better grasp frontier development and to promote cross-sectoral business co-operation, as well as arranging a wide array of workshops for young people.
The license, if approved, will allow the Gate Group to establish a new crypto exchange Gate HK. Another local company, Hippo Financial Services, won a TCSP license in August to provide virtual asset custody services.
Besides allocating a budget for the city’s Web 3 space, Paul Chan also revealed his plan to establish a task force for Virtual Asset development. The team will include industry experts, relevant policy bureaux, and financial regulators to “navigate the Web3 development in the right direction.”
Huobi is another crypto exchange that recently announced moving its Asia headquarters from Singapore to Hong Kong. It also plans to establish a new crypto exchange in the regime named Huobi Hong Kong.
SFC recently called for public consultation for its newly proposed licensing regime. The key points will focus on whether crypto exchanges should serve retail investors. The regulator will also discuss the measures that should be applied to ensure investor protection. The new licensing regime is expected to come into effect in June 2023.