Australian Crypto Exchange Evaluates Potential Expansion into Hong Kong

Updated: 24 March 2023

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What – Independent Reserve, an Australian cryptocurrency exchange, is reportedly considering expanding its operations into Hong Kong.
Why – This region has become increasingly attractive to crypto organizations due to its favorable regulatory environment.
What Next – Hong Kong has established itself as a hub for digital asset businesses, with a regulatory framework that is more welcoming compared to many other jurisdictions.

The Securities and Futures Commission (SFC) in Hong Kong has implemented a regulatory sandbox approach, which allows fintech and crypto companies to test their products and services in a controlled environment before obtaining a full license.

This approach has created a friendly environment for digital asset firms to operate in Hong Kong. While Hong Kong’s regulatory environment is favorable, businesses must consider other factors before expanding into the region. For instance, they must evaluate market demand, competition, and any legal or cultural barriers affecting their operations.

Additionally, they would need to assess the regulatory risks, given that Hong Kong has been cracking down on crypto exchanges that operate without a license. Overall, the potential move by Independent Reserve into Hong Kong demonstrates the increasing interest in the region among crypto exchanges and other digital asset businesses.

As the crypto industry continues to grow and mature, more jurisdictions are expected to adopt regulatory frameworks that are friendly to digital asset businesses, making it easier for them to operate and expand into new markets.

In June, the Hong Kong Securities and Futures Commission (SFC) is set to implement a proposed licensing regime for crypto exchanges. The regime aims to regulate and supervise the activities of crypto exchanges operating in Hong Kong, ensuring that they comply with the necessary regulatory requirements. The move is seen as a positive step towards the development and growth of the crypto industry in the region.

Adrian Przelozny, the co-founder and CEO of Independent Reserve, has confirmed that the Australian crypto exchange is exploring opportunities to expand into Hong Kong. The region’s all-accepting and friendly licensing regime has drawn the attention of many crypto organizations.

The recent announcement by the Hong Kong Securities and Futures Commission (SFC) proposing changes to the licensing regime for crypto exchanges to take effect in June has further increased the attractiveness of Hong Kong as a potential digital asset hub. Przelozny believes that Hong Kong’s regulatory changes make the region look like a friendly jurisdiction for the crypto industry.

Requirements Included In The Licensing Proposal

Independent Reserve is considering expanding to Hong Kong, following the region’s recent proposal to implement a new licensing regime for crypto exchanges.

The proposed measures, which include anti-money laundering, know your customer, counter-financing of terrorism countermeasures, conflict of interest disclosures, and audits, are set to take effect in June. If Independent Reserve establishes a base in Hong Kong, it will join Huobi and OKX as other crypto exchanges that have set up operations in the region.

The company’s CEO, Adrian Przelozny, confirmed that the Independent Reserve team plans to meet with Hong Kong banks and regulators and assess whether the location suits the company. Przelozny also noted that China is testing a more flexible crypto regime in Hong Kong and may roll it out internationally if successful.

Crypto Firms Seeking to Set up in Hong Kong

Christian Hui, Secretary of Financial Services and the Treasury, recently reported that over 80 cryptocurrency companies from mainland China and other regions have shown interest in setting up a base in Hong Kong.

Independent Reserve is a crypto-asset service provider licensed in Singapore, offering its customers a secure and regulated platform to trade digital assets. The company has been expanding its services and recently acquired the domain name Bitcoin.com.au for a whopping $2 million (equivalent to approximately $3 million in Australian dollars). With this acquisition, Independent Reserve aims to become a leading player in the Australian cryptocurrency market.

The company has already launched Bitcoin.com.au, a platform that allows customers to buy and sell Bitcoin and other cryptocurrencies using Australian dollars. The move is expected to strengthen Independent Reserve’s presence in the region and help it tap into Australia’s growing demand for digital assets.

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