Hong Kong authorities granted a digital asset portfolio management license to a subsidiary of cryptocurrency exchange Huobi Technology, the company said on Thursday.
Why it matters: The news bodes well for a number of Chinese cryptocurrency companies which face regulatory pressures at home and are looking to set up shop elsewhere. Hong Kong and Singapore are among the primary destinations.
Details: The Hong Kong Securities and Futures Commission (SFC) granted Huobi Asset Management a license to manage virtual asset portfolios, according to a company announcement on Thursday.
- Huobi Asset Management is a wholly-owned subsidiary of Huobi Technology Holdings, the Hong Kong-listed company behind Huobi Global, the world’s fourth-largest cryptocurrency exchange by volume, according to CoinMarketCap data as of the time of writing.
- The subsidiary plans to start three virtual asset funds, Chinese media reported.
- Huobi Tech’s success “reflects a larger trend of regulators taking a positive approach toward the crypto finance industry,” Flex Yang, CEO of Babel Finance, a Hong Kong cryptocurrency company that has applied for the Type 9 license in the territory, told TechNode. The new regulation will “help prepare Hong Kong’s leadership role in the increasingly competitive global regulatory environment,” he said.
Context: Huobi Asset Management received two licenses for cryptocurrency asset management in July 2020; Type 4, for advising in securities, and Type 9, for asset management.
- Chinese authorities chased crypto exchanges out of China in 2017 and cracked down on initial coin offerings, the crypto equivalent to IPOs, in an attempt to banish investment in the highly volatile assets.
- Many companies offering crypto financial services have continued to operate in the shadows, serving China’s investors and large population of cryptocurrency miners.
- In 2020, regulators started a renewed crackdown on the digital assets, targeting over-the-counter exchanges. The founder of crypto exchange OKEx was missing for weeks while he assisted the police in an investigation.