In a surprising revelation, Binance has emerged as the driving force behind the recently launched cryptocurrency trading platform in Hong Kong, known as HKVAEX. Informed insiders have disclosed that Binance masterminded the inception of HKVAEX and is actively pursuing a licensing opportunity within the city.
Collaboration Between HKVAEX and Binance
Established in December 2022 and officially launched in February, HKVAEX operates independently within Hong Kong under the corporate umbrella of BX Services Limited. However, the two entities engage in resource-sharing, with HKVAEX utilizing Binance’s servers for content distribution through its website.
Representatives from Binance have been quick to stress that HKVAEX does not fall under the purview of the Binance Group. Nonetheless, the connection between the two entities has given rise to questions and speculation. Capitalizing on the regulatory environment fostered by the city, HKVAEX is actively seeking the Securities and Futures Commission’s virtual asset trading platform license in Hong Kong.
By establishing an independent exchange in Hong Kong, Binance is poised to tap into the burgeoning cryptocurrency market within the city. This strategic move contrasts with the legal and liquidity challenges that Binance has been grappling with on the global stage.
Notably, HKVAEX has been open about its association with Binance, openly discussing it in interviews and public events. Yet, the two companies maintain distinct terms of use templates, suggesting separate legal structures.
Binance’s Stance on Hong Kong’s Licensing Initiative
Binance, originally founded in Shanghai in 2017, has been notably tight-lipped about its intentions regarding Hong Kong’s new licensing framework, which has lured other exchanges with links to China. Binance’s CEO, Zhao Changpeng, has acknowledged the potential of China’s cryptocurrency market but has refrained from public declarations of interest in securing a virtual asset license in Hong Kong.
In the midst of mounting legal challenges, Binance has witnessed executive departures, staff layoffs, and withdrawals from various international markets. The company is also embroiled in a lawsuit brought by the US Securities and Exchange Commission, which alleges artificially inflated trading volumes and the diversion of customer funds. In response to these challenges, Binance is continually adapting its global operations.
With HKVAEX actively pursuing a license in Hong Kong, the entire cryptocurrency industry will be closely monitoring how Binance’s affiliation with the platform unfolds.