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Binance is behind a newly established crypto exchange in Hong Kong that intends to apply for a license in the city, the South China Morning Post (SCMP) reported, citing sources familiar with the matter.
Binance is the driving force behind HKVAEX, which was established last December by Binance and set up its trading platform in February, the SCMP said, citing three industry insiders close to the company who spoke on the condition of anonymity because the information is private.
https://twitter.com/newsandmarket/status/1716982460762706022?s=20
HKVAEX operates as a separate entity under BX Services Limited in Hong Kong, although the companies are said to share resources, according to the report. Moreover, the report says HKVAEX uses Binance’s servers for fetching content, such as shared code, and the exchange’s content delivery domain bnbstatic.com.
The companies’ terms of use have nearly identical templates, as well, suggesting the two may also be sharing legal resources, the SCMP report said.
The report also highlighted multiple instances of collaboration between the two companies in Hong Kong this year, such as a promotional campaign where Binance was referred to as a “partner” in incentivizing opening an HKVAEX account.
Binance’s official accounts, along with CEO Changpeng Zhao, are among seven accounts followed by HKVAEX’s official account on X.
While responding to inquiries regarding its association with Binance, HKVAEX asserted that it is an independent virtual asset exchange platform based in Hong Kong.
“HKVAEX is an independent virtual asset exchange platform based in Hong Kong,” the company said in an email in response to SCMP when it was asked about its relationship with Binance. “It’s operated by a team of technology and seasoned professionals from the financial services sector, currently preparing to apply for the license.”
HKVAEX is Not Linked To Us – Binance
A Binance spokesperson said “HKVAEX is not in the Binance Group of companies.”
The world’s largest crypto exchange defines its “Binance group” in its terms of service as an “ecosystem centered around its online exchange for Digital Assets trading,” and is distinct from “Binance Affiliates,” the story said.
Setting up an independent exchange in Hong Kong could allow Binance to leverage the opportunities presented by a market seeking to establish itself as a global cryptocurrency hub.
This all comes at a time when Binance faces mounting legal scrutiny and liquidity challenges in various markets around the globe.
Crypto: @Binance CEO @cz_binance Faces Mounting Challenges Amid Regulatory Scrutiny and Legal Battles #cryptonews #blusharkmedia #web3 https://t.co/8eq6cUWGnQ
— BluShark Media (@blusharkmedia) June 10, 2023
Hong Kong’s formulation of a new licensing scheme this year was geared at attracting industry players by offering legal stability.
Many exchanges with links to China have announced their intention to pursue a Hong Kong license since the scheme’s announcement over a year ago. However, Binance, which was founded in Shanghai in 2017, has largely stayed silent on the issue.
While Binance CEO Changpeng Zhao has talked up the city’s new crypto regime and the potential of China’s crypto market, the company has not publicly expressed any intention of getting its own virtual asset license in the Asian financial hub.
According to the SCMP report, industry observers said Binance would face many challenges getting a license on its own given the headwinds it faces overseas.
In the US, Binance is facing lawsuits from the Commodities Futures Trading Commission and the Securities and Exchange Commission.
The crypto company exited Canada in May following new regulations around stablecoins and restrictions placed on crypto exchanges.
There has also been an exodus of senior executives and following the legal actions against the company in various countries.
Binance Top executive resignations in last 3 months. pic.twitter.com/Jgyp3r25GL
— Crypto India (@CryptooIndia) September 16, 2023
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