Binance has been revealed as the force behind the newly established cryptocurrency trading platform in Hong Kong, HKVAEX. Sources familiar with the matter have disclosed that Binance orchestrated the creation of HKVAEX and its intent to apply for a license in the city.
The Resource Sharing between HKVAEX and Binance
HKVAEX, established in December 2022 and launched in February, operates independently in Hong Kong under the company BX Services Limited. However, the two entities share resources, with the exchange's website utilizing Binance servers for content delivery.
Binance representatives have emphasized that HKVAEX is not part of the Binance Group. Nevertheless, the connection between the two has raised questions. HKVAEX plans to apply for the Securities and Futures Commission's virtual asset trading platform license in Hong Kong, capitalizing on the city's efforts to attract crypto industry players with legal stability.
Having an independent exchange in Hong Kong could enable Binance to tap into the growing crypto market in the city. In contrast, Binance has been facing increased legal scrutiny and liquidity challenges overseas.
HKVAEX has not shied away from the connection, openly discussing it in interviews and events. However, the two companies have distinct terms of use templates, suggesting separate legal resources.
SCMP: Binance establishes HKVAEX to apply for Hong Kong cryptocurrency compliance license. HKVAEX was established in December 2022, and its CEO Stanley Fung said in July that it was preparing to submit an application. HKVAEX shares resources and code with Binance.…
— Wu Blockchain (@WuBlockchain) October 25, 2023
Binance's Silence on Hong Kong's Licensing Scheme
Binance, founded in Shanghai in 2017, has largely remained silent on its intentions regarding Hong Kong's new licensing scheme, which has attracted other exchanges with ties to China. Binance's CEO, Zhao Changpeng, has acknowledged the potential of China's crypto market but has not publicly expressed interest in obtaining a virtual asset license in Hong Kong.
Amidst a backdrop of legal challenges, Binance has experienced significant developments, including executive departures, workerforce reductions, and the withdrawal from multiple international markets. Most notably, the company is currently entangled in a lawsuit filed by the US Securities and Exchange Commission, which alleges Binance of artificially inflated trading volumes and diverting customer funds. In response to these formidable challenges, Binance continues to adjust its operations globally.
As HKVAEX seeks a license in Hong Kong, the crypto industry will be watching to see how Binance's connection with the platform unveils.
This article was written by Tareq Sikder at www.financemagnates.com.
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