Global: Crypto exchanges Huobi, OKX eye Hong Kong licences amid regulatory changes

Major cryptocurrency exchanges Huobi Global and OKX, both of which have their roots in mainland China, have declared their intention to apply for licenses in Hong Kong under the new regulatory framework that will be in place starting in June.

Crypto exchanges would be able to extend its services to the city under the new structure, which calls for cryptocurrency exchanges to register with the Hong Kong Securities and Futures Commission (SFC). According to a tweet from Huobi advisor Justin Sun, Huobi also intends to launch Huobi Hong Kong, a new exchange focused on institutions and high-net-worth individuals.

Huobi said in January that 20% of its workforce would be let go as part of the company’s restructuring following Sun’s acquisition in October. Due to “strategic and product modifications,” the exchange stated in February that it would shut down its Huobi Cloud Wallet in May.

Star Xu, the founder of OKX, revealed on Twitter on Friday that the company had started the process of applying for a license in Hong Kong last year.

For the first time, cryptocurrency trading platforms will need a license in accordance with the city’s new regulations. The rules were put in place after the government revealed ambitions to make the city a hub for virtual assets in October of last year.

According to market watcher CoinGecko, Huobi and OKX are the ninth and eleventh largest cryptocurrency exchanges in the world by monthly visits, respectively. Each day, they handle hundreds of millions of dollars’ worth of cryptocurrency; on Tuesday, OKX was fourth and Huobi was number 27 in terms of 24-hour trading volume.

Since the city implemented a voluntary licensing framework that restricted retail participation, many professionals in the business fled Hong Kong during the past few years. Huobi and OKX, two unlicensed exchanges, could still serve consumers in the city, but businesses began trying to relocate to regions with better industry laws.

As “China’s domination” in the area grows increasingly obvious, Sun stated last month that he intended to move to Hong Kong “to be closer to the action.”