Australia-based crypto exchange Independent Reserve is looking at the opportunity to set up shop in Hong Kong, as the city continues its efforts to become a cryptocurrency hub.
Set to take effect in June, Hong Kong’s Securities and Futures Commission (SFC) released a proposed licensing regime for cryptocurrency exchanges on February 20 in line with its ambitions to become Asia’s next crypto hub.
Co-founder and CEO of Independent Reserve, Adrian Przelozny told Cointelegraph that the “friendly” licensing regime makes Hong Kong a worthy place to set up a new base, which is now being seriously considered.
“Now it looks very interesting […] Recent announcements by regulators in Hong Kong make Hong Kong look like a friendly jurisdiction.
“We see Hong Kong as a good opportunity for Independent Reserve and we are always looking for new areas in Asia where we can expand our business,” he added.
The potential move would follow that of its peers Huobi and OKX.
Under the new licensing regime, Hong Kong-based crypto companies must comply with a number of measures related to the safe custody of assets, Anti-Money Laundering (AML), Know Your Customer (KYC) and counter-financing for the prevention of terrorism. along with conflict of interest disclosures and audits.
Przelozny said his team will visit Hong Kong next week to meet with banks, regulators, lawyers and compliance experts to determine whether it is appropriate to expand.
Commenting on the region’s political relations with China, Przelozny believes that China is trying to make a more relaxed cryptocurrency regime visible in Hong Kong.
If successful, he believes China could follow suit:
“The Chinese government is using Hong Kong as a testnet to experiment with a looser cryptocurrency regime to see what impact it has on the business landscape. If they see it as a positive thing, then there is a possibility that it will be launched in China and loosen the existing restrictions.
A similar comment was made by Tron CEO Justin Sun in a December interview with Bloomberg.
He is of the opinion that China is using Hong Kong as an “experimental base” so that it can make a final decision on its policy position.
related: Hong Kong’s crypto ambitions get subtle nod from Beijing: Report
However, Przelozny cautioned, it could only represent a “temporary experiment” that could be reversed in the future.
If Independent Reserve is satisfied with the regulatory landscape, Przelozny said the last check box to move will be how expensive it is to open a store there and what it thinks the return on investment will be to do so.
Independent Reserve operates as a licensed virtual asset service provider in Singapore.
It also recently launched Bitcoin.com.au after buying a domain name for $2 million ($3 million AUD).
Australian crypto exchange Independent Reserve has bought https://t.co/caP4K5Kwnn.https://t.co/coccz49Hwe pic.twitter.com/lRHaPi5vhe
– Independent Reserve (@indepreserve) March 23, 2023
Over 80 cryptocurrency companies in mainland China and elsewhere have expressed interest in establishing a presence in Hong Kong recently, according to a March 20 statement by Christian Hui, Secretary of Finance and Financial Services.
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