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Why Hong Kong has grown into a crypto hub — CEO of WOW Summit

"Hong Kong’s 'one country, two systems' framework lets it explore digital asset innovation more freely," Ivan Ivanov told Cointelegraph.

Hong Kong has rapidly become a cryptocurrency hub, positioning itself as a center for financial innovation alongside the United Arab Emirates (UAE) and Singapore. Ivan Ivanov, global CEO of WOW Summit, said this innovation was fostered by a mixture of strong regulatory policy and Hong Kong's status as a special economic region.

Ivanov told Cointelegraph that Hong Kong's special relationship with mainland China and robust regulation allow Hong Kong to be a sandbox for financial and technical innovation, which benefits startups, nascent technologies, and institutional investors. Ivanov wrote:

The WOW Summit CEO added that Hong Kong's stablecoin policy, which requires issuers of stablecoins to acquire licenses and keep their fiat reserves in local Hong Kong banks, promotes trust and transparency in the nascent asset sector.

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US Crypto Policy Under Trump Unlikely to Slow UAE Momentum, Says DRIFE Co-Founder

US Crypto Policy Under Trump Unlikely to Slow UAE Momentum, Says DRIFE Co-FounderA co-founder of blockchain-based ride hailing believes the United Arab Emirates (UAE)’s crypto momentum won’t be significantly impacted by a new Donald Trump administration. Co-Founder Says ‘UAE Is Not Just a Fallback Option’ A new Donald Trump administration may create a more favorable crypto environment, but Firdosh Sheikh, co-founder of DRIFE, doubts any U.S. policy […]

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Hong Kong Seeks Crypto Hub Status With Tax Breaks

Hong Kong Seeks Crypto Hub Status With Tax BreaksHong Kong is proposing tax breaks for hedge funds, private equity funds, and wealthy individuals investing in cryptocurrencies. Hong Kong and Singapore Vie for Top Financial Hub Spot Hong Kong authorities have reportedly proposed exempting hedge funds, private equity funds, and wealthy individuals from paying taxes on gains from cryptocurrencies. The proposals, aimed at making […]

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Torrevieja to Become the First Crypto Friendly City in Spain

Torrevieja to Become the First Crypto Friendly City in SpainTorrevieja, a city of almost 90,000 inhabitants, aims to become one of the first crypto-friendly locations in Spain. The city, in alliance with Apymeco, its merchant association, will incentivize using cryptocurrency as a payment option and give courses for stores interested in learning how to receive and use cryptocurrency. Torrevieja to Incentivize Crypto Adoption Torrevieja, […]

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Rush for Hong Kong’s crypto licenses yet to translate to jobs: Recruiters

Hundreds of firms have been lining up for a Hong Kong crypto license, but recruiters say they are yet to see an accompanying rush for talent.

Crypto firms may appear to have been prepping entry to Hong Kong with unabated excitement, but it’s yet to translate into in-country hires, according to recruitment executives.

On June 1, around 150 companies lined up for a local crypto license which permits the operation of a local crypto trading platform. Some have reportedly even spent up to $25 million to nab one.

Speaking to Cointelegraph, Sue Wei, managing director of major recruitment firm Hays, said that while exchanges have been seeking to build a base in Hong Kong, the industry’s recruitment needs “are light as of now.”

“Many Web3 companies are still in the early stages of development, but we anticipate an increase in openings as they continue to scale up and mature.”

In fact, Wei said that since the dip in the crypto market, her firm has seen a “significant decrease in requests for recruiting technical talent.”

This was particularly the case when talent was “laid off en masse,” which made some hesitant toward working at a crypto company “due to the unstable nature of the business that mainly relies on the prices of crypto,” she said.

Similarly, crypto recruiter Cryptorecruit founder Neil Dundon said he hasn’t “really noticed much going on in Hong Kong.”

“Even though rules have changed, venture activity is extremely low right now,” he said. “Although it feels like we have bottomed, and I expect this to start trending upward from here.”

Michael Page Hong Kong’s managing director, Olga Yung, also said she’s yet to see “a significant increase” in those looking for jobs in Web3 despite the government’s recent push.

However, Yung noted a “slight uptick” in Web3 firms seeking “legal and compliance hires” in mid to late Q2 2023.

Talent war is coming

Looking ahead, Kevin Gibson, founder of Web3 recruitment firm Proof of Search, told Cointelegraph it could take six months for crypto talent to surge into the region as companies wait for license approvals.

“A lot of specialist talent has left Hong Kong in recent years,” Gibson explained. He said the local talent pool is thin, and companies landing in Hong Kong “will find themselves in an extreme war for talent.“

Setting up in Hong Kong requires key roles to be full-time positions. Gibson thinks a “talent squeeze” will continue through to 2024 as Web3 companies “will probably look to move headquarters to a pro-crypto jurisdiction if things go to plan.”

The latest data for the city’s demographics show a negative population growth rate since 2020. Employment stats for Q1 2023 show the number of vacancies increased by nearly 38% compared to the same time last year.

Hong Kong’s job vacancy rate showing an upward trend since mid-2021. Source: Census and Statistics Department

Yung added the main challenge is “attracting talent with an interest in these sectors” as many candidates are risk-averse given the “current market sentiment.“

Related: Hong Kong establishes task force to advance Web3 development

On the other hand, Neil Tan, chair of the FinTech Association of Hong Kong, said he’s “met several people that just recently switched over from TradFi to crypto.”

Tan said many are directly approached by crypto firms, while others use sites such as LinkedIn to find roles.

“TradFi keeps shedding headcount every year or two,” Tan added, “so the stability is not necessarily as attractive as it was before.”

“A lot of people are saying there’s so much positive news inside of the crypto and Web3 space in Hong Kong that they’re willing to take a shot.”

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Hong Kong to Have Tight Crypto Regulations, Head of Monetary Authority Says

Hong Kong to Have Tight Crypto Regulations, Head of Monetary Authority SaysCompanies attracted by the plan to turn Hong Kong into a hub for digital assets should expect strict regulations, the region has indicated. Authorities are preparing new licensing rules for service providers working with cryptocurrencies and guidelines for banks interacting with crypto firms. Crypto Hub Hong Kong Has No Intentions to Adopt ‘Light-Touch’ Regulations Hong […]

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Hong Kong security regulator to issue crypto license guidelines in May

The crypto business guidelines were reportedly revealed by the chief executive of Hong Kong’s Securities Futures Commission, Julia Leung.

The Hong Kong Securities Futures Commission (SFC) is reportedly set to release cryptocurrency exchange licensing guidelines next month.

The plans were reported by Bloomberg on April 27, which cited comments from the SFC’s chief executive Julia Leung on Thursday.

The incoming guidelines will provide support to crypto trading platforms that will be able to offer trading services to retail investors on June 1.

Leung said the consultation process on the licensing regime received over 150 responses from interested parties, according to Bloomberg.

Anti-Money Laundering (AML) and Know Your Client (KYC) regulatory requirements were some of the key considerations made in the Feb. 20 report that Leung was presumably referring to.

While confirmation awaits for most prospective Virtual Asset Service Provider (VASP) licensees, some trading platforms have already begun offering crypto-related services to investors under the SFC’s supervision.

OSL and Hashkey Group are amongst the few trading platforms to have already received licenses from the SFC, according to Reuters.

Related: Hong Kong’s crypto ambition gets subtle nod from Beijing: Report

Despite Hong Kong’s ambition to become the next crypto hub, not every trading platform has chosen to stick around for the long haul.

Bitget — a crypto exchange with $1.4 trillion assets in reserve — announced on April 24 that it will cease offering services to its Hong Kong customers when the Hong Kong VASP regime takes effect on June 1.

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Hong Kong’s Largest Virtual Bank Offers Crypto Conversion Services

Hong Kong’s Largest Virtual Bank Offers Crypto Conversion ServicesZA Bank, Hong Kong’s biggest virtual-only lender, intends to expand its business into the region’s growing digital assets sector. The banking platform will offer crypto-to-fiat conversions and account services as the Chinese financial center is seeking to embrace the industry. ZA Bank to Provide Services to Crypto Exchanges Licensed in Hong Kong Hong Kong’s first […]

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Hong Kong’s crypto rules set a high bar for ‘good reason,’ says SFC adviser

Lucy Gazmararian, an advisory board member to Hong Kong’s securities regulator, said its crypto rules might present short-term challenges to crypto startups.

The standards for Virtual Asset Service Providers (VASPs) in Hong Kong are set “incredibly high,” as the Securities and Futures Commission (SFC) wants the crypto industry to match the same compliance standards as traditional financial firms.

Speaking to Cointelegraph at the Hong Kong WOW Summit, Lucy Gazmararian, the founder of crypto venture firm Token Bay Capital and an SFC Fintech Advisory Group member, explained that while “the bar is set high,” it’s in place for a “good reason.”

“The standards are incredibly high because [the SFCs] approach is to ask VASPs to apply the same standards that existing financial institutions like huge banks and huge asset managers have to comply with.”

The SFC published a consultation paper on Feb. 20, which considered whether licensed VASPs should serve retail investors, and what standard of investor protection measures should be imposed.

Anti-Money Laundering and Know Your Customer policies were also discussed.

Gazmararian said these high standards might pose challenges for the crypto industry in Hong Kong over the short term.

“The issue is that crypto businesses are often in the startup phase,” she explained. “Many have funding but not huge amounts, not hundreds of millions.”

“To comply with the framework does incur significant costs,” she added, citing the need for local VASPs to have insurance, independent assessment reports and store crypto in cold storage.

“A criticism has been if you’re a startup crypto company, how do you even get started? Is that going to stifle the industry?”

With a solid regulatory framework in place, Gazmararian believes more well-capitalized financial firms will be willing to help promising startups get off the ground.

“I think companies that do get the license are going to be upholding the most stringent standards so the bar is set high but I think for good reason,” Gazmararian said.

The SFC encouraged individuals, corporations and crypto firms to review the 361-page consultation paper and provide feedback.

The securities regulator wants these entities to share their views and point to things that may have been missed because they are “absolutely focused” on getting everything right, Gazmararian explained.

Submissions for feedback on the consultation paper closed on March 31.

Related: US crackdown will push crypto ‘center of gravity’ to Hong Kong: Kaiko CEO

In recent months, Hong Kong has made considerable ground in establishing itself as the world’s next crypto hub.

More than 80 digital asset firms have expressed interest in establishing a presence in Hong Kong over the last few months, according to a March 20 statement by the Secretary for Financial Services and the Treasury, Christian Hui.

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Binance Opens Regional Blockchain Hub in Georgia

Binance Opens Regional Blockchain Hub in GeorgiaCrypto exchange Binance has announced the opening of a blockchain hub in Georgia which will promote cryptocurrency adoption in the region. The move comes on the backdrop of a number of partnerships, initiatives, and events the company is involved in in the country. Digital Asset Exchange Binance Establishes ‘Web3 Outpost’ in Georgia Binance, the world’s […]

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