- Cryptocurrency custodian firm Zodia Custody has announced expansion into Hong Kong.
- The firm is bolstering expansion into the Asia-Pacific region.
- Hong Kong has recently tightened regulatory standards for crypto establishments.
Hong Kong has shown a growing affinity for the cryptocurrency industry, underlining its ambitions to establish itself as a prominent digital hub. With the introduction of a progressive regulatory framework, the region has set an exemplary precedent for neighboring countries, openly welcoming the asset class within its financial sector.
To capitalize on the growing opportunity, Standard Chartered’s institutional crypto custodian firm, Zodia Custody, has announced plans to dive into the warming crypto market.
Zodia Custody Dives Into Hong Kong
The entry into Hong Kong represents the latest in Zodia Custody’s push for expansion into the Asia-Pacific region.
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The expansion will offer a selection of crypto assets, including its yields on crypto holdings service, to clients in Hong Kong, particularly the institutional sector. It will also provide a secure method of crypto asset storage for financial institutions operating within the region.
CEO of Zodia Custody Julian Sawyer stated, “The Hong Kong government and the regulators see digital assets as the future and also want Hong Kong to be a hub.”
The company is also reportedly engaged with Hong Kong’s Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority about becoming regulated in the financial district in compliance with the region’s regulatory standards.
Regulatory Standards in Hong
Throughout 2023, Hong Kong has served as a beacon for the burgeoning cryptocurrency industry.
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The Securities and Futures Commission (SFC) rolled out regulatory stipulations for local cryptocurrency exchanges, providing companies with the opportunity to seek registration and deliver their services in a regulated manner.
However, in September, Hong Kong witnessed a significant industry scandal involving crypto exchange JPEX, allegedly siphoning over US$434 million from 2,305 local investors, rattling the region’s industry confidence.
In response, Hong Kong announced an updated policy and approach on October 20th, reiterating its commitment to the industry. The new policy mandates licensing and a ‘one-off test’ for all crypto firms operating in the region to ensure the protection of investors and asset risk mitigation.
On the Flipside
- Zodia Custody also recently entered into Australia and Japan.
- Hong Kong’s enthusiasm for cryptocurrency assets has persisted despite China’s broader anti-crypto stance, which resulted in the ban on bitcoin trading and mining in 2021.
- The company may be required to abide by more stringent compliance standards following the infamous JPEX Scandal.
Why This Matters
Zodia Custody’s entry into Hong Kong underscores its determination to establish a strong presence in the Asia-Pacific region and offers more investment holding services to Hong Kong’s institutional client base.
To dive deeper into the regulatory standards in Hong Kong post-JPEX, read here:
SFC Vows Tougher Stance on Sus Crypto Platforms Post-JPEX
More countries are planning regulations for the fast-growing cryptocurrency industry. Find out more:
Turkey Targets Crypto Taxation and Regulation in 2024
