Independent Reserve

Aussie crypto exchange hints interest in Hong Kong base

The CEO of Independent Reserve says Hong Kong’s “friendly” licensing regime makes it a worthy destination to set up shop, but there are other factors to consider.

Australia-based crypto exchange Independent Reserve is looking at opportunities to set up shop in Hong Kong as the city continues efforts to become a cryptocurrency hub. 

Set to take effect in June, the Hong Kong Securities and Futures Commission (SFC) released a proposed licensing regime for cryptocurrency exchanges on Feb. 20 in line with its ambitions to become Asia’s next crypto hub.

Independent Reserve co-founder and CEO Adrian Przelozny told Cointelegraph the “friendly” licensing regime makes Hong Kong a worthy destination to set up a new base, something his firm is now strongly considering.

“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.”

“We see Hong Kong as a good opportunity for Independent Reserve, and we’re always looking at new areas in Asia where we can expand our business,” he added.

The potential move would follow the likes of its peers Huobi and OKX.

CEO Adrian Przelozny pictured in center with chief operating officer Lasanka Perera (left) and chief technology officer Roman Stefanidi (right). Source: Independent Reserve

Under the new licensing regime, Hong Kong-based crypto companies must comply with various measures relating to the safe custody of assets, such as Anti-Money Laundering, Know Your Customer, counter-financing of terrorism countermeasures, and conflict of interest disclosures and audits.

Przelozny said his team is visiting Hong Kong next week to meet with banks, regulators, lawyers and compliance experts to determine if the location suits the company.

Commenting on the region’s political relationship with China, Przelozny believes China is testing how a more relaxed cryptocurrency regime looks in Hong Kong.

If successful, he believes 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.”

Similar remarks were made by Tron CEO Justin Sun in a December 2022 interview on Bloomberg.

He believes that China is using Hong Kong as an “experiment base” to make a final decision on its policy stance.

Related: Hong Kong’s crypto ambition gets subtle nod from Beijing: Report

However, Przelozny is cautious that it may only represent a “transitory experiment” that could be reversed in the future.

If Independent Reserve is satisfied with the regulatory landscape, Przelozny said the last checkbox to tick would be how expensive it is to open up shop there and what it thinks the return on investment will be for doing so.

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

It also recently launched Bitcoin.com.au after purchasing the domain name for $2 million (3 million Australian dollars).

Over 80 cryptocurrency firms across mainland China and elsewhere have expressed interest in establishing a presence in Hong Kong of late, according to a March 20 statement by Christian Hui, the Secretary for Financial Services and the Treasury.

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Blockchain.com gets regulatory nod from Singapore’s central bank

Blockchain.com becomes the second crypto exchange in two days to receive preliminary approval to provide crypto services within the growing crypto hub.

Crypto exchange Blockchain.com has become the latest crypto company to secure preliminary approval from Singapore’s central bank to provide Digital Payment Token services in the city-state.

Blockchain.com’s regulatory approval follows hot on the heels of Coinbase, which revealed it had received the same “in-principle” approval from the Monetary Authority of Singapore (MAS) on Oct. 11.

If officially approved, Blockchain.com would join the likes of companies already licensed for digital Payment Token services including crypto exchanges DBS Vickers and Independent Reserve, digital payment solution provider FOMO Pay, and crypto-friendly payments application Revolut, among others.

Blockchain.com CEO and co-founder Peter Smith commended the country’s regulators for creating a “transparent regulatory process” to foster innovation, stating:

“Blockchain.com commends the Monetary Authority of Singapore on its transparent regulatory process that prioritizes crypto industry oversight while allowing innovation to thrive.”

It is not the first company to make a positive reference to the straightforward regulatory environment in Singapore for crypto companies.

Recently, digital asset platform Anchorage Digital co-founder and president Diogo Mónica pointed to Singapore’s strong regulatory environment and the emergence of a crypto hub as its motivation to choose the city-state as a “jump point” into the Asian markets.

Mónica also highlighted, in contrast, the lack of regulatory clarity in the United States as a major issue, suggesting that even if a company understands what rules govern an asset, it can be difficult to determine which of the 15 regulators they need to engage with.

Related: Why Singapore is one of the most crypto-friendly countries

In August 2021, crypto exchange Independent Reserve was one of the first of 170 global competitors to receive preliminary approval for the DPT license.

CEO Adrian Przelozny also made a positive reference to the transparency of Singapore’s regulatory environment, noting at the time:

“A well-regulated environment will benefit both investors and crypto industry stakeholders. With tailormade rules for the crypto industry, Singapore currently has the clearest and most detailed licencing requirements of any jurisdiction in Asia”

Przelozny suggested the license grants “will continue to put Singapore in pole position as the leading financial hub in Asia.”