Crypto entrepreneur Justin Sun says he will move cryptocurrency exchange Huobi’s Asia headquarters from Singapore to Hong Kong to capitalize on the city’s attempts to establish itself as a digital asset hub.
Sun, who is also the founder of blockchain network TRON, said in an interview with Nikkei Asia that he planned to expand Huobi’s operations in the financial hub by increasing staff headcount there from 50 to 200 by the end of this year. He cited the crypto-friendly policies that were recently introduced by the Hong Kong government, including allowing retail participation in the market, as factors in his decision.
He said he had full confidence that Huobi would receive a crypto trading license from the city’s regulators after applying last year. The company would launch a local entity called Huobi Hong Kong. Sun said he himself would also move to Hong Kong as early as next month.
Huobi later issued a statement saying Sun misspoke regarding the application timing and it will in fact be filed in the coming months. Sun later confirmed this to Nikkei Asia.
“These three years, Hong Kong’s regulatory framework has seen a lot of change for the better, so I am very confident in the future of crypto compliance in Asia, Hong Kong, and hopefully China,” he said, adding that the Hong Kong government would need to ensure a stable and predictable regulatory environment in order to attract more digital asset companies and investors.
Last October, a buyout vehicle managed by Hong Kong-based asset management company About Capital Management, bought the controlling stake of Huobi Global from founder Leon Li. Huobi’s new owners have remained tight-lipped over Sun’s role but the crypto exchange later said it was under Sun’s leadership in a blog post last month.
Sun’s decision comes as western countries like the U.S. are tightening crypto rules after the collapse of one of the largest cryptocurrency exchanges, FTX, in November. Regional rival Singapore, which has attracted many digital asset companies with its more favorable regulations, is also moving to adopt stricter cryptocurrency measures following last year’s market crash.
Hong Kong’s Securities and Futures Commission (SFC) announced on Monday it would begin public consultation on its new regime that could allow licensed cryptocurrency exchanges to serve retail investors.
The announcement said any person or business providing cryptocurrency-related services must apply for a license from the SFC by June 2023. Such a license will allow them to provide services to professional investors with a portfolio of at least HKD 8 million Hong Kong (USD 1 million).
This marks a shift from the more conservative approach Hong Kong took previously. In 2018, it introduced a tighter regulatory framework than other countries. As a result, only two companies, OSL and Hashkey, have received licenses to operate there so far.
Huobi was part of the early exodus of Chinese crypto firms driven out by Beijing’s crackdown on the industry. China’s central bank, the People’s Bank of China, banned all cryptocurrency transactions in late September 2021 after it began to restrict bitcoin mining.
Last month, Huobi announced it would lay off 20% of its staff globally, joining a slew of companies that are tightening their belts amid a crash in the crypto market.