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Crypto Firms in Hong Kong Get Boost as Regulators Host Meeting with Bankers

Ruholamin Haqshanas
Last updated: | 2 min read
Source: AdobeStock / f11photo

Hong Kong officials plan to host a meeting between crypto companies and bankers in an attempt to ease financing for the sector as the city pushes toward becoming a global crypto hub.

The meeting, scheduled for April 28 at the Hong Kong Monetary Authority, is intended to “facilitate direct dialog” between the two sides and “share practical experiences and perspectives in opening and maintaining bank accounts,” Bloomberg reported Tuesday.

The report added that the Hong Kong Monetary Authority, the city’s central banking institution, will hold the meeting jointly with the Securities and Futures Commission, another top regulator overseeing stablecoins and crypto exchanges.

The move comes as crypto companies are facing increasing difficulty when trying to set up corporate bank accounts in the city, even for basic needs such as payroll accounts because of strict know-your-customer (KYC) and anti-money laundering (AML) rules. 

It also comes at a time when many crypto firms are looking for new banking partners in the wake of the recent banking crisis in the US that saw three major crypto-friendly banks, including Silicon Valley Bank, Silvergate Capital, and Signature Bank, close their doors. 

As reported, a number of Chinese state-owned banks in Hong Kong, including Bank of Communications, Bank of China, and Shanghai Pudong Development Bank, have either started offering banking services to local crypto firms or have made inquiries.

The development is considered an indication that the recent move by Hong Kong to become a major digital asset center has backing from mainland China. 

Crypto Firms Eye Presence in Hong Kong Amid Growing Regulatory Scrutiny in the US

Last week, Hong Kong’s Secretary for Financial Services and the Treasury, Christian Hui, said that more than 80 companies working in the digital asset space had shown interest in establishing a presence in the city since October 2022.

The surge comes as the city has recently adopted a more crypto-friendly stance in a bid to reclaim its position as a global crypto hub and attract more crypto companies, specifically those facing a difficult time operating from mainland China.

Among the more favorable developments, Hong Kong’s Securities and Futures Commission (SFC) has published a consultation paper on its proposed regulatory regime for crypto trading platforms, inviting market participants to share their views. 

The regulator also said that retail investors would be allowed to trade certain “large-cap tokens” on licensed exchanges, given that safeguards such as knowledge tests, risk profiles, and reasonable limits on exposure are put in place.

Meanwhile, regulators in the US, specifically the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), have launched an aggressive crackdown on the crypto industry. 

Just yesterday, the CFTC announced that it is suing Binance and founder Changpeng “CZ” Zhao on allegations that the crypto exchange knowingly offered unregistered crypto derivative products in the US in the transgression of the law.

Prior to this, the SEC had sent a so-called “Wells notice” to Coinbase, threatening the crypto exchange with legal actions regarding some of its listed digital assets, its staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet.