Australian bitcoin exchange signals Hong Kong interest

Independent Reserve, an Australian cryptocurrency exchange, is exploring chances to establish a presence in Hong Kong as the city continues its ambitions to become a cryptocurrency center.

In an effort to become Asia’s next crypto hotspot, the Hong Kong Securities and Futures Commission (SFC) on February 20 suggested a licensing scheme for cryptocurrency exchanges that would go into effect in June.

Adrian Przelozny, co-founder and chief executive officer of Independent Reserve, said that the “friendly” licensing environment makes Hong Kong an attractive location for establishing a new headquarters, something his company is now firmly investigating.

“Right now it is looking very interesting. The recent announcement by the regulators in Hong Kong does make Hong Kong look like a friendly jurisdiction.”

He continued, “We consider Hong Kong as a wonderful potential for Independent Reserve, and we’re continually exploring for new regions in Asia to develop our company.”

The possible move would be comparable to those of its competitors Huobi and OKX.

Under the new licensing regime, Hong Kong-based crypto companies will be required to comply with a variety of measures concerning the safe custody of assets, Anti-Money Laundering (AML), Know Your Customer (KYC), and counter-financing of terrorism countermeasures, as well as conflict of interest disclosures and audits.

Next week, Przelozny’s team will go to Hong Kong to meet with banks, regulators, attorneys, and compliance specialists to see whether the location is fit for expansion.

Przelozny, commenting on the region’s political connection with China, thinks that Beijing is ob

serving the effects of a more permissive cryptocurrency policy in Hong Kong.

In the event of success, he thinks China may follow suit:

“The Chinese government is using Hong Kong as a testnet to experiment with a looser cryptocurrency regime to see what impact that has on the business landscape there. If they see it as a positive thing, then I think there’s a chance they’ll roll it out through China and loosen their existing restrictions.”

Justin Sun, CEO of Tron, made such statements in a December interview with Bloomberg.

He is of the opinion that China is utilizing Hong Kong as a “testing ground” in order to determine its ultimate policy position.

Przelozny is concerned, though, that it may be a “temporary experiment” that might be overturned in the future.

If Independent Reserve is pleased with the regulatory environment, Przelozny said the last considerations would be the cost of establishing a business there and the anticipated return on investment.

Independent Reserve operates in Singapore as a licensed virtual asset service provider.

It also just established Bitcoin.com.au after paying $2 million ($3 million AUD) for the domain name.

According to a March 20 announcement by Christian Hui, the Secretary of Financial Services and the Treasury, over eighty cryptocurrency enterprises from mainland China and overseas have recently indicated interest in establishing a presence in Hong Kong.