The post <a href="https://coinpedia.org/news/binance-faces-uphill-battle-for-hong-kong-license-after-binance-us-guilty-plea/" rel="noopener noreferrer nofollow">Binance Faces Uphill Battle for Hong Kong License After Binance US Guilty Plea</a> appeared first on <a href="https://coinpedia.org" rel="noopener noreferrer nofollow">Coinpedia Fintech News</a>
The recent guilty plea by Binance and its founder, <a href="https://twitter.com/cz_binance/status/1727063503125766367" rel="noopener noreferrer nofollow">Changpeng Zhao</a>, to US anti-money-laundering laws may pose challenges for the cryptocurrency exchange’s plans to obtain a legitimate foothold in Hong Kong.
Binance, which is <a href="https://www.cftc.gov/PressRoom/PressReleases/8826-23" rel="noopener noreferrer nofollow">facing</a> mounting regulatory troubles in the US, has set up a separate crypto exchange in Hong Kong named HKVAEX to pursue a license in the city.
Binance, the world’s largest cryptocurrency <a href="https://www.justice.gov/opa/video/binance-and-ceo-plead-guilty-federal-charges-4b-resolution" rel="noopener noreferrer nofollow">exchange</a>, has faced legal troubles in the US, leading to its founder Changpeng Zhao’s guilty plea to anti-money-laundering charges. This development may hinder Binance’s plans to establish a legitimate presence in Hong Kong, where it has set up a separate crypto exchange called HKVAEX to pursue a license.
<h2 class="wp-block-heading" id="h-hong-kong-s-licensing-regime">Hong Kong’s licensing regime</h2>
Hong Kong recently introduced a mandatory licensing regime for centralized exchanges that allows retail investors to participate. <a href="https://www.hkvaex.hk/en" rel="noopener noreferrer nofollow">HKVAEX</a>, which is backed by Binance, is pursuing a license under this regime. However, observers have highlighted the difficulties Binance would face in obtaining a license, given its legal issues elsewhere. The Hong Kong Monetary Authority (HKMA) has “robust requirements” for Virtual Asset Trading Platform applicants as well as for their substantial shareholders.
The general counsel at blockchain firm Scroll said that Hong Kong’s Securities and Futures Commission (SFC) has “robust requirements” for Virtual Asset Trading Platform applicants, as well as for their substantial shareholders, ultimate owners, or other controllers.
<blockquote class="wp-block-quote">
 “Any individual or entity falling under these categories who fails to adhere to anti-money-laundering (AML) regulations in Hong Kong or any other jurisdiction, or who has been convicted of money laundering or terrorist financing offenses, will face heightened scrutiny from the SFC during the application process. Such violations are considered directly relevant to the SFC’s assessment of an applicant’s suitability and integrity.” <cite>&nbsp;Patricia Ho&nbsp; </cite>
</blockquote>
Binance’s licensing prospects in Hong Kong remain uncertain, according to Elizabeth Wong, the SFC’s Director of Licensing and Head of Fintech Unit. She cited a lack of clarity regarding Binance’s market entry strategy and structure as a key factor. This ambiguity is further compounded by Binance’s absence from the SFC’s list of virtual asset trading platform operators seeking licenses.

Binance Faces Uphill Battle for Hong Kong License After Binance US Guilty Plea

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