An employee from PwC informed about Hong Kong’s major cryptocurrency market players’ readiness to relocate at any moment. So they have a backup plan in case of the local regulator’s policy tightening.
If regulatory uncertainty persists, a major crypto business is ready to leave Hong Kong, according to the information provided by the head of the cryptocurrency and fintech direction of the Asian region PriceWaterhouseCoopers (PwC), Henri Arslanian:
“All the major crypto companies in Hong Kong have already started a contingency plan to relocate their business due to uncertainty” – he said.
The expert did not specify the region the crypto companies of Hong Kong are considering relocating to.
Important to note is that back in 2018, Hong Kong’s Authority outlined a regulatory framework for the crypto industry. Still, despite the seemingly loyal attitude, the authorities are in no hurry to provide official licenses to companies. It looks like the regulator wants to “straddle both worlds”, not to lose a large crypto business and not be contrary to the world’s largest economies position on this issue (Great Britain, USA, China, etc.).
As of this writing (August 18, 2021), only one company (OSL) has received an official license to provide crypto services. However, this did not affect the number of retail investors in the region in any way. OST has a fairly high threshold – 8 million Hong Kong dollars (around $1 million). Obviously, such limits reduce the number of applicants.
Arslanian believes such a financial regulator`s position will lead to the loss of many cryptocurrency companies in the region, thus, the loss of investments flow. On the other hand, jurisdictions relatively loyal to the digital economy would profit the most from it.
Recall that the mood of crypto investors in Hong Kong worsened after the authorities’ initiative to tighten access to exchanges. The new amendments probably don’t let retail investors trade, while sites are bound to obtain a state license. However, those amendments have not yet gained legal force. The authorities have not yet commented on the dates.