Binance’s guilty plea casts shadow over potential Hong Kong expansion Binance’s guilty plea casts shadow over potential Hong Kong expansion
Hong Kong's SFC said Binance is not among the platforms seeking a license in the region presently.
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Updated: Nov. 24, 2023 at 10:53 am UTC
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Binance’s recent guilty plea in the United States could impact its plans to expand into Hong Kong, the South China Morning Post (SCMP) reported on Nov. 24, citing industry experts.
On Nov. 20, Binance, the largest crypto exchange by trading volume, agreed to a $4 billion settlement with the U.S. authorities, with its founder Changpeng ‘CZ’ Zhao resigning as CEO after pleading guilty to money laundering charges.
According to the SCMP report, this development could significantly impact HKVAEX, a local crypto platform with links to Binance, and reduce its chances of securing licensing in the Asian country due to its strict regulatory regime.
Hong Kong’s Securities and Futures Commission (SFC) imposes strict regulations for Virtual Asset Trading Platform applicants and applies these rules to the major stakeholders of these firms. As such, individuals connected to an exchange seeking approval must not have violated anti-money laundering laws in Hong Kong or globally nor possess serious criminal records.
However, it is unclear how this could impact the licensing process, as HKVAEX reportedly said it is an independent platform. At the same time, Binance claims that the Hong Kong-based exchange had no affiliation with its group of companies.
SFC’s view on Binance
SCMP further reported that Elizabeth Wong, the director of licensing and head of Fintech at the SFC, expressed uncertainty about whether Binance’s recent guilty plea in the U.S. might impact its chances of securing a license in the region.
Wong highlighted the difficulty in predicting whether the exchange’s application would be approved or rejected, emphasizing that factors such as its market entry approach and organizational structure would significantly influence the fate of the application.
Additionally, the SFC official noted that Binance is not presently among the virtual asset trading platforms seeking a license in the region.
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Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Changpeng Zhao, popularly known as “CZ,” is a notable figure in the cryptocurrency world, primarily for founding and leading Binance, the world’s leading cryptocurrency exchange by trading volume.