TronWeekly

Crypto World News

You are here: Home / Search for "hong kong"

Search Results for: hong kong

Standard Chartered’s Crypto Venture Expands To Hong Kong

by

UK-based Zodia Custody, a digital asset custodian supported by Standard Chartered, has recently extended its services to Hong Kong, marking a significant expansion in the Asia-Pacific region, according to a CNBC report. Established in 2020, Zodia Custody specializes in providing secure investment opportunities in cryptocurrencies, primarily catering to institutional clients such as corporations and professional investors.

The decision to expand into Hong Kong was driven by the substantial demand for crypto assets, especially from institutional entities rather than individual retail customers, as per Julian Sawyer, Zodia’s CEO.

The Hong Kong government and the regulators see digital assets as the future and also want Hong Kong to be a hub. What we’re seeing is there are absolutely clients in all of those four markets who want to do things. We also see a lot of other clients and prospects outside those four jurisdictions that want to come in on the institutional side.

Hong Kong’s robust market appetite for cryptocurrencies, coupled with a progressive stance from the government and regulators, made it an ideal destination for Zodia’s expansion efforts. The Hong Kong authorities view digital assets as integral to the future financial landscape and are keen on establishing the city as a hub for such innovations.

Standard Chartered
Standard Chartered's Crypto Venture Expands To Hong Kong 2

Zodia Custody’s expansion into Hong Kong is part of its proactive approach in the Asia-Pacific region. In recent months, the company has extended its services to countries such as Japan, Singapore, and Australia. Importantly, Zodia Custody is not undertaking this expansion journey alone; it has formed strategic partnerships with well-established institutions like Standard Chartered, Northern Trust, and Japan’s SBI Holdings.

This expansion aligns with the backdrop of Hong Kong’s banking regulator urging major financial institutions, including HSBC and Standard Chartered, to consider embracing cryptocurrency exchanges as their clients. Although Hong Kong’s banks have not imposed outright bans on crypto clients, their cautious approach stems from concerns about potential legal consequences if these platforms are linked to money laundering or illicit activities.

Standard Chartered Under Regulatory Spotlight

Standard Chartered, being a significant player in Hong Kong, holds key positions as issuers of the city’s currency and within the Hong Kong Association of Banks lobby group. A spokesperson from Standard Chartered emphasized the bank’s ongoing dialogues with regulators on various topics.

Concurrently, Zodia Custody is engaging in discussions with both the Securities and Futures Commission [SFC] and the Hong Kong Monetary Authority to ensure regulatory compliance within the financial district. This signifies Zodia Custody’s dedication to operating within the bounds of regulations and maintaining a compliant business approach.

Binance’s Covert Moves In Hong Kong’s Crypto World: The HKVAEX Revelation – Report

by

Binance, the world’s leading cryptocurrency exchange, is reportedly the driving force behind establishing a new cryptocurrency trading platform in Hong Kong. The platform, known as HKVAEX, has recently announced its intention to apply for a cryptocurrency license in the city, according to confidential sources cited in an exclusive report by the South China Morning Post on October 25th.

image 118

HKVAEX was established by the leading crypto exchange in Decembe­r 2022 and began its trading operations in February. Its main objective is to acquire a crypto license in Hong Kong, as disclosed by three individuals closely associated with the company, who wish to remain anonymous due­ to the confidential nature of the­ information. 

Although HKVAEX operates indepe­ndently under BX Service­s Limited in Hong Kong, it shares various resources with Binance. Interestingly, the­ exchange’s website indicates that it utilizes the leading exchange’s se­rvers for content retrie­val.

In response to questions regarding its association with the leading exchange, HKVAEX emphasized its independence, stating, “HKVAEX is an independent virtual asset exchange platform based in Hong Kong.” The platform is currently preparing to apply for the Securities and Futures Commission’s virtual asset trading platform license.

A representative from Binance clarified, “HKVAEX is not in the Binance Group of companies.” Its definition of its “Binance group” as an ecosystem distinct from “Binance Affiliates” was highlighted.

In 2023, Hong Kong introduced a new licensing scheme aimed at attracting players in the cryptocurrency industry. The­ scheme offers le­gal stability as an incentive. Since its announce­ment, several e­xchanges associated with China have expressed their inte­ntions to pursue a Hong Kong license. But Binance, founded in Shanghai in 2017, has remained relatively quiet on this matter.

HKVAEX, under the leadership of CEO Stanley Fung, publicly expressed its plan to apply for Hong Kong’s virtual asset license in a video interview with a Hong Kong crypto YouTuber in July. 

The Link Between Binance & HKVAEX

Concerns about the connection between the two exchanges had been raised earlier, with HKVAEX claiming independence but acknowledging that it sourced from global exchanges like Binance. The two companies also collaborated in several events in Hong Kong this year, indicating a close relationship.

Moreover, both companies’ websites share similarities, including code and content delivery domains, suggesting a potential exchange of technical and legal resources. Despite Binance’s CEO promoting Hong Kong’s crypto regime and China’s crypto market, the company has not publicly expressed interest in obtaining its own virtual asset license in Hong Kong.

Related Reading | SEC Drops Case Against Ripple Execs As Judge Signs Dismissal Order

Redefining The Crypto Horizon: Hong Kong’s Dynamic Regulatory Shifts

by

To adapt to the evolving landscape of the crypto industry, the Hong Kong Securities and Futures Commission (SFC) has made significant updates to its virtual asset policy. These changes, outlined in a joint circular with the Hong Kong Monetary Authority (HKMA), aim to regulate the distribution of virtual asset-related products and services. The policy, which was last revised in 2018, is being adjusted to account for the rapidly evolving landscape of crypto assets and the growing interest from intermediaries.

Opening Doors for Retail Crypto Investors

The SFC and HKMA have observed a surge in inquiries from intermediaries regarding virtual asset-related products (VA-related products) and the provision of virtual asset-dealing services. To address this, the policy has been revised to provide more detailed guidelines and protection for investors.

The main changes include a distinction between professional and non-professional investors in distributing VA-related products. Complex VA-related products will now only be available to professional investors, while non-professional investors must undergo assessments of their knowledge regarding virtual assets. If they lack this knowledge, intermediaries must provide appropriate training.

Despite the increasing popularity of virtual assets globally, regulatory standards remain inconsistent. The risks associated with virtual asset investments, such as lack of regulation for service providers and potential market manipulation, continue to exist. Consequently, VA-related products are considered complex and subject to strict suitability requirements.

In addition to the complex product requirements, the SFC and HKMA have introduced further investor protection measures for specific risks related to these products. Selling restrictions will now be imposed on complex VA-related products, limiting their distribution to professional investors. Intermediaries must also conduct virtual asset-knowledge tests for non-professional clients.

Regarding the provision of virtual asset dealing services, intermediaries will now only be allowed to partner with SFC-licensed platforms, ensuring a higher level of investor protection. Furthermore, the SFC and HKMA have emphasized that intermediaries should be cautious when providing financial accommodation for VA-related products. They should ensure clients have the financial capacity to manage potential losses.

These updates aim to protect crypto investors in the ever-expanding world of virtual assets. Intermediaries are expected to align their systems and controls with these new requirements, and new entrants or those extending their services must ensure compliance from the outset.

The SFC and HKMA also stress the importance of informing them of any intentions to engage in activities related to virtual assets and tokenized securities and to provide notifications of any changes to these activities.

Related Reading | Crypto’s Challenging Q3: Insights From Binance’s ‘Market Pulse’ Report

Crypto Sentiments In Hong Kong: 41% Shy Away Following JPEX Scandal

by

Public sentiment towards crypto in Hong Kong has taken a nosedive in the wake of the JPEX crypto exchange scandal, according to the initial findings of a comprehensive survey conducted by The Hong Kong University of Science and Technology’s business school. The research sought to gauge the scandal’s impact on public attitudes toward virtual assets (VAs).

image 85 2
Crypto Sentiments In Hong Kong: 41% Shy Away Following JPEX Scandal 5

The survey revealed that a staggering 41% of respondents in Hong Kong now prefer not to hold VAs, marking a significant increase of 12 percentage points since a previous survey conducted before the JPEX scandal. The study, conducted in two phases, has tracked public sentiments regarding VA investments, intentions, and regulatory safeguards.

In this latest round of findings, approximately 20% of respondents expressed a desire to hold VAs in the future, a notable decrease of five percentage points compared to data collected before the financial incident.

With 84% of respondents confirming their awareness of virtual assets, recent events have triggered greater interest in regulatory issues and a more cautious investment approach. Associate Dean of the HKUST Business School, Prof. Allen Huang, emphasized that while VAs have the potential to drive financial sector innovation, they also pose significant risks and challenges for investors and regulators.

The survey also highlighted the media sources respondents rely on for information about VAs. “Other online resources” such as websites, blogs, podcasts, and videos were deemed the most important by 23% of respondents, closely followed by social media (21%) and traditional media like newspapers, magazines, and television (18%).

Prefer To Invest In Crypto

Regarding investment preferences, 61% of respondents identified crypto exchanges as their preferred medium for holding VAs. Among the various types of VAs, Bitcoin emerged as the top choice for 73% of respondents, followed by NFTs (24%) and Ether (21%).

Interestingly, most willing to invest in VAs plan to invest HK$50,000 or less. Respondents also preferred directly owning tokens and investing in ETFs over investing in VA derivatives or companies operating in the crypto space.

Furthermore, approximately 57% of respondents in the second-phase survey are aware of Hong Kong’s regulatory requirement for VA asset service providers, including crypto exchanges, to obtain licenses for operation, indicating a significant increase of 15 percentage points compared to the first-phase survey.

Despite the increase in regulatory awareness, there is still a common misconception among over half of the respondents that virtual assets traded on HK-licensed exchanges are approved by regulators.

Related Reading |  Ethereum Foundation Clarifies Vitalik Buterin’s $15M USDC Transaction 

Crypto Knowledge Gap: Half Of Hong Kong Retail Investors Unaware Of New Regulations

by

A recent report by the Investor and Financial Education Council (IFEC) of Hong Kong reveals that only 47% of retail crypto investors in the region are aware of the Virtual Asset Trading Platform Regulatory Regime. 

This legislation, which was implemented in June, aims to safeguard the interests of retail investors in digital assets. The IFEC’s survey also shed light on the growing trend of cryptocurrency investments among young adults.

According to the survey, nearly a quarter of Hong Kong adults between the ages of 18 and 29 have dabbled in digital currencies over the past year. It represents a substantial increase from 2019, when only 3% of respondents in the same demographic reported investing in digital assets. 

Despite this surge in crypto investment, traditional financial instruments remain the top choice for Hong Kongers, with 96% preferring stocks, followed by mutual funds and trusts (24%) and bonds (18%).

As cited by approximately three-quarters of the respondents, the primary motivation behind investing in cryptocurrencies is the pursuit of “short-term profits” and the “fear of missing out.” 

Dora Li, the general manager of IFEC, emphasized the importance of understanding product characteristics and related risks before making investment decisions to align with financial goals and risk tolerance.

Eric Chui, the head of the Department of Applied Social Sciences at PolyU, stressed the need for more deliberate and rational thinking among virtual asset investors. He encouraged them to enhance their financial literacy and gather high-quality market information to avoid irrational investment behavior and biases.

Hong Kong’s OTC Crypto Market Gains Ground

Last week, Chainalysis reported that Hong Kong’s active over-the-counter (OTC) crypto market saw $64 billion in trading volume during the previous year. This figure is in close competition with China’s $86.4 billion despite Hong Kong’s considerably smaller population. 

The data reflects a degree of crypto tolerance by Beijing, as it maintains strict prohibitions on cryptocurrencies. Chainalysis speculates that Hong Kong’s burgeoning status as a crypto hub may signal a potential shift in the Chinese government’s stance on digital assets.

Hong Kong’s strength in large institutional digital assets transactions is also notable, with nearly 47% of its annual trades being institutional transactions exceeding $10 million. 

image 52

While retail trades under $10,000 accounted for just 4% of the city’s volume, slightly below the global average of 4.7%. In contrast, South Korea heavily leans on retail trading on centralized exchanges, with “professional” traders making up 40% of the volume.

Related Reading | Bitcoin’s Explosive Rise: A 5% Asset Allocation Success

Binance Faces Phishing Scam Wave: Hong Kong Police Issue Alert

by

11 Hong Kong-based Binance customers have fallen victim to fraudulent text messages in a recent wave of phishing scams, according to a warning issued by the Hong Kong police. The alert, shared on October 9 through their “CyberDefender” Facebook page, highlighted a growing concern in the cryptocurrency community.

Investors Lose Over $446,000 In Binance Phishing Attacks

The modus operandi of these scammers involved sending text messages masquerading as Binance, claiming that users needed to click on a link provided to verify their identity details within a stipulated time frame. 

The warning emphasized the consequence of not complying—account deactivation. Unfortunately, those who fell prey to this ruse unwittingly handed over their personal information to hackers, who subsequently gained full access to their Binance accounts, emptying their wallets.

The damage inflicted by this phishing scheme has been substantial, with the 11 victims collectively reporting losses exceeding $446,000 (3.5 million Hong Kong dollars) in just the past two weeks. 

In response to these incidents, Hong Kong’s police force has urged anyone who suspects they’ve received fraudulent messages to log the suspicious communication on the “fraud prevention” section of their official website. Additionally, they’ve provided a link to a newly published list of verified virtual asset trading platforms, courtesy of the Hong Kong Securities and Futures Commission (SFC).

These phishing attacks add to recent scams and fraudulent activities that have hit Hong Kong’s crypto investors. The JPEX crypto exchange scandal, which unfolded with misleading advertisements and unsustainable returns on lending products, swelled to approximately $180 million in losses. Over 2,300 Hong Kong-based investors have filed complaints with local authorities.

In light of this, the SFC has taken measures to publish a list encompassing both fully licensed and “suspicious” crypto platforms to combat potential fraud, mirroring a similar incident at JPEX, which led to multiple arrests and the shutdown of its services.

A task force comprising the SFC and various law enforcement units, including commercial crime, cybersecurity, technology crime, and financial intelligence and investigations police bureaus, has been established to address these concerns. 

The collaboration aims to share information on suspicious activities, assess the risks associated with problematic virtual asset trading platforms, and enhance coordination and cooperation in related investigations.

Related Reading | Shiba Inu’s Transactions Skyrocketed to 353% Amidst Price Slump

Hong Kong’s Crypto Crisis: Mixin Network Temporarily Halts Services

by

Hong Kong has been the center of attention for the past few weeks due to the crypto crisis, so this series has another unfortunate event. Mixin Network, a Hong Kong-based decentralized wallet service, has temporarily suspended deposit and withdrawal services due to a recent cyberattack that resulted in the loss of approximately $200 million worth of assets. 

The attack took place during the early hours of September 23, 2023, Hong Kong time. Hackers specifically targeted the database­ of Mixin Network’s cloud service provide­r.

The company, Mixin Ne­twork, has announced via Twitter that they are currently investigating the bre­ach. They have also reached out for assistance from Google and SlowMist_Team, a blockchain se­curity firm.

While de­posit and withdrawal services are te­mporarily halted, transfers remain unaffe­cted. The company has indicated that once vulnerabilities are confirmed and resolved, they will re­store the service­s.

Mixin Network’s founder, Feng Xiaodong, will hold a public Mandarin livestream on September 25, 2023, at 13:00 HKT to address the incident and provide further details. The company has promised to announce a solution regarding the lost assets in due course and expressed deep apologies for the incident, thanking their supporters for their continuous backing.

Hong Kong SFC Takes Action Against Suspected Cryptocurrency Fraud

Meanwhile, in response to the JPEX incident, which could potentially be the largest fraud case in Hong Kong’s history, the Hong Kong Securities and Futures Commission (SFC) held a press conference today. 

They announced the creation of a special blacklist targeting suspicious cryptocurrency trading platforms. They pledged to collaborate with law enforcement to take legal action against platforms suspected of violating the law.

The virtual asset trading platform under scrutiny is suspected of fraud, with reports from 2,305 individuals involving around 1.43 billion yuan as of September 23, 2023. Hong Kong Legco member Johnny Ng supported the SFC’s efforts and emphasized the importance of timely information dissemination and investor education regarding virtual asset trading platforms.

The China Securities Regulatory Commission also held a press conference, unveiling a series of measures to strengthen information dissemination and investor education in the virtual asset space. 

These measures include publishing lists of virtual asset trading platforms, optimizing a special list of suspicious platforms, and conducting awareness campaigns for fraud prevention.

Ng expressed his support for these measures. Additionally, he proposed the establishment of a “Web3 and Virtual Asse­t Development Subcommitte­e” to enhance re­gulations and facilitate discussions on optimization measures.

He aims to ove­rsee the re­sponsible developme­nt of Hong Kong’s virtual asset industry. His goals include safeguarding inve­stors and reinforcing Hong Kong’s stature as a global financial hub in the virtual asse­t sector.

However, the crypto industry’s future in Hong Kong remains a topic of keen interest as both Mixin Network and regulatory authorities respond to these challenges. 

Related Reading | Coinbase’s AML Victory Ignites European Crypto Revolution

Elusive Crypto Mastermind: Hong Kong’s JPEX Scandal Takes an International Twist

by

The leader of JPEX, Hong Kong’s largest crypto rug pull case, is suspected of having fled to Australia, prompting urgent action as its Australian company was deregistered. Hong Kong police have announced their intention to seek Interpol’s assistance in the fugitive hunt. Meanwhile, nearly 4,000 victims find themselves entangled in the scandal, with approximately US$178 million of funds at stake.

Suspects’ Roles in the Cryptocurrency Scheme

As the investigation unfolds, it becomes increasingly clear that the 11 suspects questioned by local police are unlikely to be the masterminds behind the massive financial fraud. 

Authorities are now focusing on unraveling the extent of these suspects’ knowledge regarding the JPEX cryptocurrency platform operations before the allegations come to light.

Intriguingly, investigators are also digging into potential connections between some of the suspects and over-the-counter virtual asset money changers. To date, the police have received 2,265 complaints from victims, resulting in the arrest of 11 individuals on suspicion of conspiracy to defraud.

Among those taken into custody are Joseph Lam Chok, a former barrister turned insurance executive turned social media influencer at the age of 33, as well as YouTubers Chan Wing-yee, 36, and Chu Ka-fai, 31. Lam has distanced himself from JPEX during a press conference at his upscale Mid-Levels home, asserting that he is no longer involved in its operations.

Additionally, the corporate secretary of the JPEX Technical Support Company, Tsang Cho-shun, 22, and two other individuals associated with Web 3.0 Technical Support, Jason Chan Hiu-ho, 22, and Tang Lap-shun, 26, have also been detained.

Sources suggest that Kwok Ho-lun, the sole director of Web 3.0 Technical Support, is among those sought by the police, raising questions about his involvement in establishing the firm. Kwok is also the director of CoinLedge Limited and Crypto Wesearch Media Limited, with CoinLedge being a blockchain media company that previously promoted JPEX.

Further complicating matters, Wong Ho-pong, director of the Apestaurant Group, is connected to To The Moon Group and is linked to over-the-counter virtual asset money-changing services. 

Notably, actor and singer Julian Cheung Chi-lam and Malaysian actress Jacqueline Ch’ng Se Min, previously featured in promotional videos for JPEX, were questioned but not arrested. Feng Shui master and TV host Clement Chan Ting-bong, who endorsed JPEX in the past, also faced questioning.

An Australian company registered as “JP-EX Crypto Asset Platform Pty Ltd” initiated voluntary deregistration with the Australian Securities and Investments Commission shortly after the first eight arrests were made in Hong Kong. 

However, the investigation remains ongoing, with further arrests on the horizon, and Interpol’s involvement is anticipated as digital coin transfers linked to the platform are uncovered.

Related Reading | Bitcoin Faces Volatility as $3B in Options Set to Expire

Crypto Kings: Hong Kong Reigns Supreme In 2023 Global Crypto Readiness Rankings

by

Hong Kong has once again secured its position as the world’s most crypto-ready jurisdiction for the second consecutive year, according to the latest Global Crypto Readiness Report. The study evaluated factors such as the presence of digital currency infrastructure, accessibility, legality, and public interest in it.

image 34 8

In the report, which expanded its scope to include all countries within the OECD, G20, and European Union, Hong Kong emerged as the clear leader with an overall score of 8.36. 

The semi-autonomous region of China boasts a rich history as a global trade and commerce hub, and this reputation has extended into this economy. Hong Kong offers traders a 0% tax rate, a robust network of crypto ATMs, and a thriving blockchain and crypto industry.

Switzerland has achie­ved an impressive second spot globally, boasting a remarkable score of 8.18. Re­nowned for its robust financial sector, Switzerland not only e­mbraces digital currencies but also e­xhibits a significant concentration of crypto and blockchain businesses, capturing the­ interest of its citizens in this e­merging field.

The Unite­d States secured the­ third position with a solid score of 7.25. Renowned as a global e­conomic powerhouse and technological frontrunne­r. It showcased an impressive pre­sence in the this re­alm, boasting abundant ATMs and nurturing an environment conducive to wide­spread digital currency adoption.

This year’s report notably saw five new countries entering the top 10. Slovenia and Georgia shared the fourth position, Canada jumped to sixth place, Australia climbed to seventh place, Germany secured the eighth spot, and Bulgaria and Panama tied for ninth place.

image 35

The Netherlands topped the list for the highest rate of crypto searches per capita, followed by Singapore and Slovenia, indicating strong interest in digital currencies in these regions.

Crypto ATMs: Hong Kong Leads the Way 

The Unite­d States takes pride in having the­ highest number of crypto ATMs worldwide. It is close­ly followed by Canada and Georgia, highlighting how accessible­ digital currencies are for U.S. residents. However, owing to its de­nse population, Hong Kong leads in ATMs per square foot, with Switzerland and the Unite­d States following closely behind.

image 34 9

Regarding taxation, numerous countries have introduced a 0% tax rate on crypto profits; however, the spe­cific regulations vary. The legal status of digital curre­ncies also displays significant discrepancies across nations: some­ fully embrace them while­ others enforce bans or implementation restrictions.

Whereas, New York emerged as the fore­most state in the United State­s with a high level of readine­ss for digital currencies. It was closely followed by Connecticut and Massachusetts, making the Northe­ast region a prominent hub for crypto activities.

Related Reading | Binance.US Leadership Exodus Continues Amid Regulatory Heat: Report

Crypto Clarity: Hong Kong Lawmaker Invites Ethereum Founder To Gain Insights

by

Johnny Ng, a prominent lawmaker in Hong Kong, has invited Ethereum co-founder Vitalik Buterin to visit Hong Kong and gain a deeper understanding of the region’s cryptocurrency policies and regulations. According to Ng, Hong Kong boasts a stable policy environment with cryptocurrency-friendly measures that have undergone rigorous social consensus and procedural scrutiny.

Understanding Hong Kong’s Crypto Landscape

In a recent tweet, Johnny Ng, an influential member of the Legislative­ Council of Hong Kong, addressed remarks made by Vitalik Buterin regarding the cryptocurre­ncy landscape in Hong Kong.

Buterin expressed uncertainty regarding the stability of Hong Kong’s cryptocurrency-friendline­ss since the previous year’s end. However, Ng conte­sted these vie­ws, asserting that the region re­mains fully committed to cryptocurrency development without wavering.

Ng’s invitation to Buterin extends beyond a mere visit. He offered to facilitate engagements with relevant institutions and businesses to provide Buterin with comprehensive insights into Hong Kong’s situation. Ng stated:

I respect his right to speak, but at the same time, I think he does not understand the situation in Hong Kong.

Concerning Bute­rin’s apprehensions about the intricate­ dynamics between Hong Kong and mainland China, Ng clarifie­d that Hong Kong maintains legislative autonomy within the framework of “one country, two systems.”

The policie­s and laws in Hong Kong undergo a comprehensive­ discussion process. This includes government policy drafting, public consultation, and deliberation in multiple­ legislative committee­s and the General Asse­mbly.

Responding to Buterin’s query about the stability of cryptocurrency-friendly policies, Ng emphasized that Hong Kong’s policies are inherently stable. He pointed out that all cryptocurrency-related strategies and regulations have been developed through extensive social consensus and comprehensive procedures, ensuring their resilience and continuity.

Ng said:

Hong Kong’s policies and laws will not change overnight. All relevant strategies and regulations have gone through major social consensus and complete procedures. Therefore, I can tell Mr. Vitalik that Hong Kong’s policies are very stable.

Nevertheless, Johnny Ng’s message conveys Hong Kong’s commitment to fostering a cryptocurrency-friendly ecosystem while emphasizing the stability and transparency of its policy-making processes. Whether Vitalik Buterin will accept the invitation and engage in a constructive dialogue to further mutual understanding remains to be seen.

Related Reading | Binance’s Aid Efforts in Morocco Earthquake Stir Mixed Reactions