Binance, the world’s leading cryptocurrency exchange, is purportedly being linked to the launch of a new crypto exchange in Hong Kong. The revelation was made by insiders familiar with the matter.
Reportedly a Binance initiative, the new exchange, HKVAEX, was established in December 2022 and launched its trading platform in February, aiming to obtain a cryptocurrency license in Hong Kong.
Companies Share Servers
Three industry insiders who requested anonymity due to the private nature of the details shared this information.
BX Services Limited, a Hong Kong-based company, formed HKVAEX as a separate entity. Despite distinct identities, both share resources, with HKVAEX using Binance servers for content retrieval.
The company said in an email to the South China Morning Post on its relationship with Binance:
“HKVAEX is an independent virtual asset exchange platform based in Hong Kong. It’s operated by a team of technology and seasoned professionals from the financial services sector, currently preparing to apply for the [Securities and Futures Commission’s virtual asset trading platform] license.”
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Binance could potentially involve itself in HKVAEX as a strategic maneuver to capitalize on the burgeoning crypto market in Hong Kong. This move emerges as Binance faces increasing legal scrutiny and liquidity issues overseas.
The establishment of HKVAEX may give Binance the opportunity to operate with legal stability in Hong Kong’s newly regulated environment.
The Hong Kong Securities and Futures Commission (SFC) recently stepped up regulatory measures on crypto exchanges. In a statement, it said:
“The SFC and its subsidiary the Investor and Financial Education Council (IFEC) have been working closely together to educate and warn investors about the risks of trading on unregulated platforms.”
Since announcing the licensing scheme, several exchanges tied to China have stated their intention to apply for a Hong Kong license. However, Binance, which they originally founded in Shanghai in 2017, has notably remained silent on the matter.
HKVAEX, on the other hand, is preparing to submit an application for Hong Kong’s virtual asset license, as stated by CEO Stanley Fung in a video interview in July.
Binance Link Acknowledged
In April, someone on Twitter first highlighted the connection between Binance and HKVAEX with a query. A company representative responded to a question about the tweet in a company-run Telegram messenger group. Indeed, they confirmed HKVAEX’s independence. However, they also admitted that they source from global exchanges like Binance.
This year, the two companies have participated jointly in several events in Hong Kong, including collaborating with the University of Hong Kong’s Blockchain Lab for a cryptocurrency workshop.
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Indeed, both Binance.com and HKVAEX.hk share noticeable similarities. For instance, they both incorporate shared code in their operations. Additionally, they make use of Binance’s domain bnbstatic.com, further solidifying their connection.
Despite the apparent connections, Binance co-founder and CEO Changpeng Zhao has not publicly expressed an interest in obtaining a Hong Kong virtual asset license. Binance has faced several legal challenges, seen several key executives leave, and withdrawn from multiple European markets.
It remains to be seen how these developments will impact Binance’s operations and its alleged involvement with HKVAEX.
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