Binance reportedly behind new Hong Kong crypto exchange pursuing license

Binance appears to be the driving force behind a recently launched crypto exchange in Hong Kong.

South China Morning Post reported on Wednesday that the exchange HKVAEX was established in Hong Kong as an independent entity under BX Services Limited.

Despite not having similar names or a publicly acknowledged connection, they share resources, the report said, citing sources.

Notably, Binance and HKVAEX’s logos bear resemblance, and Binance’s official accounts, along with CEO Changpeng Zhao, are among HKVAEX’s few followers on social media platform X.

Stanley Fung, now at the helm of HKVAEX, served as the chief of Huobi’s Hong Kong operations until Nov. 2022, according to LinkedIn. His departure coincided with crypto entrepreneur Justin Sun’s entry into Huobi’s management.

Binance’s services itself are not available in Hong Kong, and establishing an autonomous entity within the city could provide a strategic foothold in the market.

Binance and HKVAEX didn’t return Blockworks’ request for comment by press time.

Since Hong Kong regulators introduced their licensing scheme earlier this year, there seems to be increasing enthusiasm among digital asset entities to establish operations in the region.

Alvin Kan, head of Asia at Sei Labs, earlier told Blockworks that Asia is set to emerge as a significant expansion zone for the Web3 sector. He noted that regulatory developments in the US have amplified opportunities outside the country.

Binance, launched in 2017 in Shanghai, has mostly been quiet about its own plans to seek a license in Hong Kong.

In contrast, SCMP reported that HKVAEX is gearing up to apply for a virtual asset license in Hong Kong.

In a company-managed Telegram group, HKVAEX said that it operates as an “independent crypto exchange” in Hong Kong, separate from Binance, but that it sources liquidity from Binance. 

Despite HKVAEX’s insistence on independence and having its own tech team, SCMP 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 has encountered a series of regulatory challenges this year.

In May, Binance exited Canada following new regulations around stablecoins and restrictions placed on crypto exchanges.

In the US, sweeping lawsuits from the Commodities Futures Trading Commission and the Securities and Exchange Commission targeted Binance, its CEO Changpeng Zhao and related entities.
Several top officials have departed Binance following the SEC’s legal actions against the company.

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