Hong Kong is ‘Highly Unattractive’ for Coinbase

Lavina Daryanani
Source: Freepik

Hong Kong is one of the few regions that remains committed to becoming a crypto hub. Right from sharpening its regulations and relaxing restrictions, to assisting firms from the crypto space with banking and inviting companies to come set up base, the special administrative region has been dedicatedly working in that direction over the past few months. Recently, a Hong Kong lawmaker encouraged global digital asset trading operators to set up shop and register in the region. Coinbase was specifically mentioned in council member Johnny Ng’s invitation.

Here it is worth noting that Hong Kong’s Securities and Futures Commission started accepting applications for crypto trading platform licenses this month. Companies that get registered under this license will be green-flagged to serve retail customers in the region. Alongside, they will also need to comply with rules that forbid incentives, like airdrops.

Companies in the U.S. are currently seeking clarity on crypto regulations. Amid several lawsuits thrusted upon companies for alleged violations, several have shown interest to expand abroad. Coinbase scoring a personalized invite in such a scenario was well-received by the community.

Also Read: Hong Kong Regulators to Assist Crypto Firms with Banking

Hong Kong would be a terrible base for Coinbase: Bitcoin Association of HK Prez

However, not everyone seems to be on the same page. Leo Weese, the co-founder and President of the Bitcoin Association of Hong Kong, recently said in an interview that Hong Kong could end up being a terrible host for Coinbase. Specifically, he said,

“Hong Kong’s framework as it exists today is highly unattractive. The market is small and unproven, banking partnerships are non-existent, and products are highly restricted.”

Weese further went on to underline how the Asian markets are “fundamentally different” from their Western counterparts. Consequentially, Coinbase will not automatically succeed in the region, even if it is ready to give up its current customer base. So, even if Coinbase makes the move, it would not prove to be fruitful. He added,

“What makes Hong Kong potentially attractive is that many tokens are not deemed securities, and those that do not need to be registered like in the United States, making it possible to offer trading for tokens that are deemed unregistered securities elsewhere, such as decentralized protocols.”

The Bitcoin Association executive also said that moving to Hong Kong will not shield Coinbase from U.S. regulations or the SEC.

Also Read: CBDC: Hong Kong Central Bank to Lay Foundations for e-HKD