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

July 9, 2023 Coin Telegraph

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.“

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 security regulator to issue crypto license guidelines in May

April 27, 2023 Coin Telegraph

Bitget

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.

Julia Leung, CEO, the Securities and Futures Commission Hong Kong speech at Bloomberg #virtualasset #esg #wealthconnect #ifc pic.twitter.com/M1eCHLP1VZ
— Finance Mandarin 漢通金融學院 (@FinanceMandarin) April 27, 2023

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.

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

April 5, 2023 Coin Telegraph

Coin Telegraph

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.

“Cryptocurrency platforms are part of the entire Web 3.0 ecosystem, and we strongly support the development of the entire Internet ecosystem.
— ivanferrari.eth.zk (@ferrarivarese) April 3, 2023

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.

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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Gate.io to enter Hong Kong following city’s $6.4M budget allocation to Web3

February 23, 2023 Coin Telegraph

Budget

Gate’s founder called Hong Kong a “hub,” meanwhile, the city’s financial secretary said the region “must keep up” with the “huge potential” of Web3.

Cryptocurrency exchange Gate.io is gearing up to launch a presence in Hong Kong following the local government's planned $6.4 million (50 million Hong Kong dollar) cash injection into Web3 as per the city’s 2023-24 budget.

Gate Group said on Feb. 22 that it will apply for a crypto license in Hong Kong allowing it to launch “Gate HK.” The firm's local company, Hippo Financial Services, gained a license in August 2022 to provide virtual asset custodial services.

It comes as Hong Kong financial secretary, Paul Chan, announced the Web3-related funding and the creation of a crypto task force in a Feb. 22 budget speech.

He added Web3 has “huge potential” and the Special Administrative Region of China must keep pace with its “continuous development.”

“We must keep up with the times and seize this golden opportunity to spearhead innovation development.”

Chan outlined the funds would go toward expediting “the Web3 ecosystem development” by organizing international seminars, promoting business cooperation and arranging “workshops for young people.”

He noted a “large number” of companies are considering setting up shop in the city due to the government’s cryptocurrency laws. Gate Group’s founder, Dr. Han Lin, called Hong Kong “a global strategic market” and a “hub” due to its “industry-leading regulatory regime.”

Very excited about Hong Kong. Having obtained the TCSP License in HK, Gate Group is also preparing for a crypto license and fine tuning Gate HK, a new entity tailored to serve HK’s growing crypto market, stay tuned.
— Lin Han (@han_gate) February 21, 2023

Hong Kong shared its plans on Feb. 20 with a new licensing regime and a proposal to allow retail traders access to licensed crypto platforms.

Due to the influx of business interest, Chan said he “will establish and lead a task force” on virtual asset development made up of members from financial regulators, market participants and “relevant policy bureaux.”

The task force would “provide recommendations on the sustainable and responsible development of the sector” according to Chan.

Hong Kong started its push to gain status as a global crypto hub in October 2022 by launching crypto-friendly policy frameworks to regulate the industry within the city.

Despite being a region of China, the city’s special status allows for its own laws and governance. Hong Kong’s crypto push would seem to be in contrast to China’s crypto ban, but it's reported that officials in Beijing are quietly backing the region's crypto ambitions.

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

February 21, 2023 Coin Telegraph

Asia

While China has cracked down on cryptocurrencies in the mainland, it’s apparently taking a softer approach to Hong Kong’s crypto hub aspirations.

Hong Kong’s ambition of becoming a cryptocurrency hub is reportedly seeing subtle support from the Chinese government, in what could be seen as a contrast to the mainland’s hard-line anti-crypto stance.

In October last year, the government of Hong Kong floated the idea of introducing its own bill to regulate crypto and allow retail investors to “directly invest into virtual assets” that could possibly be in contrast to China’s widespread crypto ban.

According to people familiar with the matter, Beijing officials have not been brazenly opposed to the idea. According to a Feb. 20 Bloomberg report, it is understood that representatives from the China Liaison Office have been frequenting Hong Kong crypto gatherings seeking to understand what’s going on.

So far, their encounters with Beijing officials on the matter have been friendly, according to those familiar, which is being perceived by local crypto business operators that Beijing — albeit very subtly — may be open to using Hong Kong as a testbed for crypto.

New Bitcoin narrative brewing: Hong Kong is getting into crypto.

What makes it even more interesting is the People's Bank of China is one of the only central banks in the world cutting rates & easing.

Asia is bidding [sources] pic.twitter.com/n5cwE7jI2l
— Luke Martin (@VentureCoinist) February 16, 2023

Hong Kong is a Special Administrative Region of China, allowing it to have its own laws and governance. The former British colony was transferred back to China in 1997 following a guarantee from Beijing there would be no Chinese interference with the region’s economic and political systems for 50 years, known as the “one country, two systems” principle.

National People’s Congress member and digital asset lawyer Nick Chan was quoted as saying that as long as there are no violations of “the bottom line, to not threaten financial stability in China,” then the city is free to undertake its own pursuits.

On Feb. 20, Hong Kong’s Securities and Futures Commission outlined a new crypto license regime that proposed that all centralized exchanges that operate in the region must be licensed with the regulator.

It also proposed allowing retail traders access to licensed cryptocurrency trading platforms, saying public feedback highlighted that denying access to crypto markets may push Hong Kongers to trade on unregulated overseas platforms.

The new regulatory push has spurred many crypto businesses to seek expansion into the city. Most recently the exchange Huobi Global said it would seek a local license and plans to open a new Hong Kong-only exchange with a focus on institutional and high-net-worth individuals.

HK legislator’s firm to lure 1,000 Web3 start-ups over 3 years

December 23, 2022 Coin Telegraph

Coin Telegraph

G-Rocket is aiming to attract 1,000 Web3 start-ups to Hong Kong and will help them with banking, government services and office spaces.

A start-up accelerator co-founded by Hong Kong legislative council member Jonny Ng Kit-Chong wants to attract 1,000 Web3 businesses to set up shop in the city-state over the next three years.

Ng Kit-Chong is a member of the legislative council for the election committee constituency and has been in office since January this year. The engineer and politician has his finger in a lot of pots as he has declared owning shares in roughly 40 different companies.

One such company is the start-up accelerator G-Rocket, which he co-founded alongside Casper Wong in 2016.

Wong is the current CEO and spoke to the South China Morning Post on Dec. 23 about the firm’s new aptly named program “Hong Kong Web 3.0 Hub.”

The CEO outlined that G-Rocket is first looking to help 100 Web3 start-ups get their business off the ground, before scaling the number up to 1,000 within three years.

“We hope to help bring good companies and talent back to Hong Kong in the post-pandemic era,” Wong said.

In particular, Wong stated that the firm will work in tandem with the virtual ZA Bank, a government-run incubator dubbed Cyberport and property conglomerate New World Development to help Hong Kong startups get access to office space, banking and government services.

Broader Web3 push

G-Rocket’s initiative comes as part of a broader push from the Hong Kong government to make the special administrative region (SAR) of China a crypto hub that can compete with Singapore.

In late October, Elizabeth Wong, the head of the fintech unit at the Securities and Futures Commission (SFC) of Hong Kong, announced a host of progressive regulatory crypto proposals, including the legalization of virtual asset trading.

“We will put in place timely and necessary crash barriers to mitigate actual and potential risks in line with international standards, so that virtual asset innovations can thrive in Hong Kong in a sustainable manner,” an Oct. 31 government statement read.

As of Oct. 31, the SFC also started allowing listings for exchange traded funds (ETFs) that offer exposure to Bitcoin (BTC) and Ether (ETH), with CSOP Asset Management being one of the first to jump in.

Cointelegraph reported on Dec. 15 that CSOP Asset Management had raised $73.6 million in investments ahead of listing two crypto futures ETFs on the Hong Kong Stock exchange the following day.

On Dec. 8, Hong Kong’s legislative council also passed an amendment to its Anti-Money Laundering (AML) and terrorist financing system to include virtual asset service providers alongside traditional finance institutions.

crypto hub

Talent war is coming

Broader Web3 push

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