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OKX will apply for a virtual asset licence in Hong Kong as the city revises its regulations

OKX, a cryptocurrency exchange, announced plans to apply for a virtual assets trading licence in Hong Kong, the latest indication of the city's growing attractiveness as a global virtual asset hub as US regulators investigate Binance and Huobi's Justin Sun.

OKX, which claims to be the world's second-largest crypto exchange by trading volume, announced on Tuesday that it is seeking for the licence in Hong Kong, only two months before the city officially legalises crypto trading.

Hong Kong's aim to entice cryptocurrency exchanges has turned it into a haven at a time when the global crypto investment community is still grieving from the collapse of FTX, as well as a more aggressive regulatory attitude in the US.

During a media briefing in Hong Kong on Tuesday, Lennix Lai, the firm's managing director of global institutional, stated that OKX sees "immense potential" in the city and is eager to invest in people and engage with regulators "over the next five years to continue strengthening the local ecosystem."

OKX stated that it has been preparing for almost a year to fulfil Hong Kong's new regulatory regulations governing cryptocurrency exchanges, which will take effect in June of this year.

The exchange will establish two entities: Hong Kong Fintech Company Limited, which will apply for brokerage and exchange licences, and Hong Kong Custody Limited, which will apply for a trust and company service provider (TSCP) licence to retain assets.

Crypto trading platforms would need a licence to provide trading services to Hong Kong citizens under the new regulations, which were implemented after the government unveiled plans last October to transform the city into a virtual asset powerhouse.

Hong Kong's regulatory overhaul is garnering interest, in part because it intends to provide clarity on cryptocurrency governance in the aftermath of last year's market fall and the collapse of FTX, once the world's second-largest crypto exchange, amid charges of fraud.

Many people in the cryptocurrency business have fled Hong Kong in recent years, when the city implemented a voluntary licencing scheme that restricted retail engagement. Unlicensed exchanges, including OKX, could continue serve consumers in the city, but companies began to relocate to markets with more favourable industry rules, such as Singapore.

The US Commodities Futures Trading Commission filed a lawsuit against Binance and its founder Zhao Changpeng on Monday, alleging that the business provided unregistered crypto derivative products in the US, which is illegal under federal law.

Additionally, the SEC prosecuted Chinese cryptocurrency entrepreneur Justin Sun with fraud last week, accusing eight celebrities, including actress Lindsay Lohan and rapper Soulja Boy, of fraudulently advertising his crypto assets. Sun is regarded as the public face of Huobi, one of the largest cryptocurrency exchanges in the world.



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