The HKVAEX-Binance link in Hong Kong’s crypto scene
Insiders have said that Binance is behind HKVAEX, which is reportedly planning to apply for a cryptocurrency trading license in Hong Kong.
A few minutes every morning is all you need.
Stay up to date on the world's Headlines and Human Stories. It's fun, it's factual, it's fluff-free.
The backstory: Earlier this year, a new cryptocurrency trading platform, HKVAEX, burst onto the scene. It officially started trading in February, but what caught people's attention was the rumor that it had ties to Binance, the world's largest cryptocurrency exchange.
Binance has been locked in a legal battle with the US Securities and Exchange Commission (SEC) over crypto regulations. Essentially, the SEC wants to regulate crypto like it does traditional securities, but crypto firms argue that digital assets should get their own specific rules. The SEC is cracking down on crypto companies and has taken legal action against several, including Binance. In August, Binance fought back with a court order against the SEC, saying its demands were over the top.
On the other side of the world, Hong Kong is aiming to establish itself in the cryptocurrency scene through a licensing system. But Binance, originally from China, has been pretty quiet about its stance on these new regulations.
More recently: Beyond the courtroom drama, Binance has faced several setbacks. In June, it temporarily halted US dollar withdrawals through its US-based affiliate, Binance.US. In July, it had to withdraw its crypto license application in Germany. And in September it shut down operations in Russia. It also has plans to stop its Visa debit card service in Europe by December 20.
The development: Insiders have said that Binance is behind HKVAEX, which is reportedly planning to apply for a cryptocurrency trading license in Hong Kong. HKVAEX operates as its own company in Hong Kong under the name BX Services Limited. Although it's a separate entity, it shares some resources with Binance, for example, its website uses Binance servers for content delivery. Binance is quick to emphasize that HKVAEX is not officially part of the “Binance Group,” emphasizing that there's a clear distinction.
HKVAEX has been vocal about its goal to become a licensed virtual asset trading platform following Hong Kong's Securities and Futures Commission regulations. It's worth noting that, until recently, Binance hadn't been very open about its desire for a virtual asset license in Hong Kong. But by having an independent exchange, it could tap into the crypto market despite its regulatory battles overseas.
Key comments:
“HKVAEX is an independent virtual asset exchange platform based in Hong Kong,” HKVAEX responded to SCMP's inquiries via email regarding its association with Binance. “It’s operated by a team of technology and seasoned professionals from the financial services sector, currently preparing to apply for the [Securities and Futures Commission’s virtual asset trading platform] licence.”
"Binance confirms it has proactively withdrawn its BaFin (Germany's financial regulator) application. The situation, both in the global market and regulation, has changed significantly," said a Binance spokesperson in July.
"Given that Changpeng Zhao and Binance have control of the platforms' customers' assets and have been able to commingle customer assets or divert customer assets as they please ... these prohibitions are essential to protecting investor assets," said Gurbir Grewal, director of the SEC's enforcement division, in a statement.
Comments ()