Aussie crypto exchange hints at interest in Hong Kong base

Australia-based cryptocurrency exchange Independent Reserve is eyeing opportunities to set up shop in Hong Kong as the city continues its efforts to become a cryptocurrency hub.

The Hong Kong Securities and Futures Commission (SFC) is set to come into force in June 20, in line with its ambitions to become Asia’s next crypto hub.

Independent Reserve co-founder and CEO Adrian Przelozny told Cointelegraph that the “friendly” licensing regime makes Hong Kong a worthy destination for establishing a new base, something his firm is now strongly considering.

– Right now it looks very interesting […] The recent announcement by Hong Kong regulators makes Hong Kong look like a friendly jurisdiction.”

“We see Hong Kong as a good opportunity for Independent Reserve and we are always looking at new areas in Asia where we can expand our business,” he added.

The potential move will follow the likes of its peers Huobi and OKX.

Under the new licensing regime, Hong Kong-based crypto companies must comply with various measures related to the safe custody of assets, such as Anti-Money Laundering, Know Your Customer, Counter-Financing Terrorism Countermeasures, and Disclosure of Conflicts of Interest and Audits.

Przelozny said his team is visiting Hong Kong next week to meet with banks, regulators, lawyers and compliance experts to determine whether the location is a good fit for the company.

Commenting on the region’s political relationship with China, Przelozny believes that China is testing what a more relaxed cryptocurrency regime looks like in Hong Kong.

If successful, he believes China may follow suit:

“The Chinese government is using Hong Kong as a testbed to experiment with a looser cryptocurrency regime to see what impact it has on the business landscape there. If they see it as a positive thing, then I think there is a chance they will roll it out through China and loosen their existing restrictions.”

Similar comments were made by Tron CEO Justin Sun in a December 2022 interview on Bloomberg.

He believes that China is using Hong Kong as an “experimental base” to make a final decision on its political stance.

Related: Hong Kong’s crypto ambition gets subtle nods from Beijing: Report

However, Przelozny cautions that it may only represent a “transient experiment” that could be reversed in the future.

If Independent Reserve is satisfied with the regulatory landscape, Przelozny said the last box to check off will be how expensive it is to set up shop there and what it thinks the return on investment will be for doing so.

Independent Reserve operates as a licensed virtual asset service provider in Singapore.

It also recently launched Bitcoin.com.au after buying the domain name for $2 million ($3 million AUD).

More than 80 cryptocurrency firms across China and elsewhere have expressed interest in establishing a presence in Hong Kong recently, according to a March 20 statement from Christian Hui, the secretary for financial services and the Ministry of Finance.

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