Crypto exchanges Huobi, OKX eye Hong Kong licences as regulators ready new virtual asset rules

The exchanges, both founded in mainland China, are the first major industry players to say they will apply for licences that will be required from June

The announcements come after new details this week on how Hong Kong will allow retail investment in cryptocurrencies as it seeks to become a virtual asset hub

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Huobi’s Justin Sun announced on Twitter that the exchange is applying for a license in Hong Kong, which will be required to operate in the city from June. Photo: Shutterstock

Published: 6:00pm, 21 Feb 2023Updated: 8:07pm, 21 Feb 2023

Cryptocurrency exchanges Huobi Global and OKX, both founded in mainland China, are the first major players in the industry to announce their intent to apply for licences in Hong Kong under new requirements to operate in the city that go into effect in June.

Huobi adviser Justin Sun, a high-profile figure in the industry who also founded the blockchain platform Tron, announced the company’s plans on Twitter on Monday, adding that it would launch a new exchange called Houbi Hong Kong to be compliant with new regulations.

In another Twitter post on Friday, OKX founder Star Xu said his company started its Hong Kong licence application last year. Lennix Lai, the firm’s managing director, retweeted the message on Monday, saying the company has a team of more than 20 people working on compliance in Hong Kong.

Under the city’s new regulations, crypto trading platforms will be required to have a licence for the first time. The regulations were introduced after the government announced plans last October to turn the city into a virtual asset hub.

Huobi and OKX are the ninth and 11th largest crypto exchanges in the world by monthly visits, respectively, according to market tracker CoinGecko. They both handle hundreds of millions of dollars worth of crypto each day, with OKX ranking fourth and Huobi 27th by 24-hour trading volume on Tuesday.

Their interest in Hong Kong may also not be coincidental. They were two of the largest exchanges to flee mainland China during Beijing’s crackdowns on the industry several years ago. They are now both headquartered in the Seychelles, although have personnel operating out of other locations.

Last month, Sun said he was planning to relocate to Hong Kong “to be closer to the action” as “China’s dominance” in the space becomes more apparent. In an interview with Nikkei Asia, Sun also said Huobi would relocate its Asia headquarters to Hong Kong from Singapore.