Huobi HK, a subsidiary of digital asset exchange Huobi Global, has made an announcement stating that it is now providing crypto spot trading services to both retail and institutional clients in Hong Kong.
The exchange has taken a significant step by submitting an application notice to the Hong Kong Securities and Futures Commission on May 29. This move is in line with the regulatory requirements as crypto firms need to obtain a virtual asset exchange license before offering regulated services.
Earlier in February, Justin Sun said that Huobi has applied for a license that allows it to offer crypto trading services in Hong Kong as the Chinese territory pushes to become a hub for digital assets.
In a major shift, the crypto entrepreneur also revealed that Huobi’s Asia headquarters will be relocated from Singapore to Hong Kong. The founder of blockchain network TRON explained that the venture includes launching a new exchange in Hong Kong, aptly named Huobi Hong Kong.
At the time though, Sun said the new exchange would initially cater to high-net-worth individuals and institutional investors, offering a “trusted and secure platform” for deep-pocket Asian investors to invest in digital assets.
The move also comes barely a week after Hong Kong’s regulator revealed plans to permit licensed cryptocurrency platforms to cater to retail investors under its new regulatory framework for the sector.
The proposed guidelines encompass various aspects such as asset custody safety requirements, cybersecurity standards, and the segregation of client assets, among others. This will be implemented from June 1, coinciding with the launch of a new licensing regime for virtual asset platforms.
Nevertheless, the SFC will keep retail traders prohibited from trading stablecoins until new regulatory arrangements are put in place for these assets. The decision comes after the SFC concluded its consultation paper on regulating crypto activities, where it highlighted the need to focus on the risks associated with stablecoins and their regulation.
The regulator said it wants to ensure that stablecoin reserves are appropriately managed to maintain price stability and safeguard investors’ ability to exercise redemption rights. It emphasizes that if these risks are not effectively managed, they could have significant implications for the stability of a stablecoin.
The move towards more crypto-friendly regulation is part of Hong Kong’s efforts to restore its position as a leading financial center following the pandemic and political unrest in the territory. Although there has been no change in China’s official stance on cryptocurrencies, which remain heavily restricted on the mainland, there are indications that Hong Kong’s push to become a major hub for digital assets has the support of Beijing.