- Hong Kong-licensed crypto exchange HashKey is expanding its regulatory footprint.
- A newly unveiled HashKey Global platform has obtained a new operational license.
- The exchange seeks to expand its product offerings with a new global platform.
Despite the growing influence of the crypto industry, the global regulatory landscape remains uneven, marked by contrasting approaches to oversight by financial authorities. With exchanges lamenting a lack of a clear path to becoming a registered, compliant entity in the U.S., many have elected to look. Perhaps the biggest advocate of operating in full compliance, and certainly the most vocal, is Coinbase, an example that its peers in the industry are looking to follow and eventually topple.
Joining the course as a contender, HashKey has laid bare its aspirations to overthrow Coinbase as the most compliant exchange in the industry as it adds another operational license to its belt.
HashKey Global Goes Live
In a Bloomberg interview on April 8, HashKey Chief Operating Officer Weng Xiaoqi announced the acquisition of the Bermuda Comprehensive Digital Asset Investor Protection System License. This license enables the exchange to launch the HashKey Global trading platform, expanding beyond its inaugural Hong Kong-licensed exchange offerings.
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HashKey Global MD Ben El-Baz emphasized that the acquisition was influenced by Coinbase’s attainment of the Bermuda license in 2022, which solidified its position as one of the most compliant exchanges in the industry. El-Baz highlighted that HashKey was inspired by Coinbase’s “regulatory and safety backend” and Binance’s successful “user and product experience” and asserted the exchange’s vision to combine the two features into one platform.
“Our goal long term, within the next five years, is to be the largest globally compliant exchange in the world,” he stated in a Bloomberg interview, adding that the group “aims to establish one of the world’s largest clusters of exchanges.”
While HashKey caters to institutional clients in Hong Kong and adjacent markets, the newly licensed global platform will focus on retail investors who cannot access the Hong Kong market, excluding mainland China and the United States.
Over the next quarter, HashKey Global will launch additional services, including spot and perpetual futures trading, to provide users with a stable and regulated trading and exchange option. This underscores the exchange’s efforts to chart a sustainable course toward establishing a regulated position, particularly to secure stability within the uneven crypto regulatory landscape.
Uneven Regulatory Standards in Crypto
Regulations in crypto have become a watchword as global financial authorities seek to tighten oversight on the asset class.
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However, while some regulatory watchdogs accommodate the industry, others remain cautious, implementing enforcement actions to keep service providers and exchanges at bay.
Spearheaded by the United States Securities and Exchange Commission, the stringent regulatory standards have resulted in actions against crypto firms such as Binance, Kraken, and Ripple, as well as Coinbase, which champions the calls for clearer industry guidelines.
Coinbase has consistently opposed the commission’s ‘regulation by enforcement campaign’ through various means, including a petition to establish a tailored regulatory framework for the industry. The exchange emphasized that the SEC’s actions stem from Chair Gary Gensler’s proclamation that most digital assets are securities despite initially indicating its limited authority over the asset class.
Industry activists and lawmakers have also urged initiating a long-overdue rule-making process to mitigate the effects of the SEC’s stringent actions.
On the Flipside
- The ongoing regulatory cleanse in Hong Kong following the JPEX scandal, which resulted in investors’ losses of over $400 million, has mandated the exit of unlicensed exchanges in the region.
- The Hong Kong SFC has recently flagged exchanges, including Bybit and Sure X, as suspicious and unreliable.
- Other regulatory bodies, such as the Nigerian SEC, have also faced criticism for an unclear approach to the industry, exemplified by its ongoing battle with crypto exchange Binance.
Why This Matters
HashKey Global’s expansion efforts underscore the increasing actions among crypto exchanges to establish solid regulatory bases, given the varying and evolving standards across the industry. However, its aspiration to surpass Coinbase underscores a bold ambition, necessitating a sustained trajectory and strategic positioning, particularly considering Coinbase’s position and influence in the industry.
Here’s how the Hong Kong SFC is ensuring crypto user protection. Read more:
Hong Kong Flags Six Crypto Websites Posing as HashKey and OSL
Find out more about the regulatory standards in the Philippines and the ongoing eToro scrutiny:
eToro Faces Philippines Scrutiny for Alleged Securities Sale
