In the wake of mounting regulatory challenges, Binance, the world’s leading cryptocurrency exchange, faces uncertainty in securing a crypto license in Hong Kong. The recent guilty plea by Binance founder Changpeng Zhao to US anti-money-laundering laws has cast a shadow over the exchange’s plans to secure a license in the country.

Meanwhile, as the industry watches this unfolding saga, Elizabeth Wong, Director of Licensing and Head of Fintech unit at Hong Kong’s Securities and Futures Commission (SFC), raises crucial questions about Binance’s potential license approval.

Binance Faces Challenges in Hong Kong

The leading crypto exchange, Binance might face regulatory hurdles to secure a legitimate status in offering its services in Hong Kong, South China Morning Post reported while citing industry experts. According to the report, Binance’s entanglement with US authorities, including a guilty plea to anti-money-laundering and sanctions violations, poses a considerable challenge to its aspirations in Hong Kong.

Despite its reportedly local affiliate HKVAEX preparing to apply for a crypto license, the shared resources and significant ties with Binance could complicate matters. Experts point to the stringent requirements of the Securities and Futures Commission, emphasizing the need for applicants to demonstrate compliance with anti-money-laundering laws.

However, responding to last month’s claims that HKVAEX was set up by Binance to secure a license in Hong Kong, HKVAEX said that it is working as an “independent” digital asset exchange. In addition, Binance said that HKVAEX is not there in its “Group of companies.”

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SFC’s Cautionary Stance: Elizabeth Wong’s Remarks Raise Eyebrows

In a recent podcast hosted by Web3 Harbour, Elizabeth Wong, the SFC’s Director of Licensing and Head of the Fintech unit, addressed the looming question of Binance’s license in Hong Kong. When asked about the possibility in light of Binance’s guilty plea in the US, Wong remained cautious, citing a lack of information on Binance’s market entry strategy and structure.

Meanwhile, discussions swirled about Binance pursuing a license under new CEO Richard Teng. In response, Wong said that the entity is not present on the SFC’s “list yet,” referring to the SFC’s list of virtual asset trading platform operators with submitted license applications.

Notably, this ambiguity adds another layer of uncertainty to Binance’s regulatory journey in Hong Kong. As regulatory pressures intensify, Binance’s uncertain standing in Hong Kong becomes a focal point of industry scrutiny.

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The post Hong Kong SFC Wary of Binance’s License Amid Regulatory Pressures appeared first on CoinGape.

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Filed under: News - @ November 24, 2023 6:24 am