A second major Hong Kong–based cryptocurrency exchange is planning on setting up shop in Malta, a small island nation in the Mediterranean.
OKEx, one of the top five cryptocurrency exchanges by 24-hour trading volume, announced today, April 12, 2018, that it is expanding its operations to Malta. In late March, Binance, the largest exchange by trading volume, also announced plans to move operations to the cryptocurrency-friendly EU member state.
In an email to Bitcoin Magazine, a spokesperson for OKEx clarified, “… everything stays in Hong Kong (all functions) and we are establishing a new entity in Malta in full accordance with the expected Malta regulations and framework. This expansion has no effect on our existing offices and operations in other jurisdictions.”
OKEx CEO Chris Lee stated: “We look forward to working with the Malta government as it is forward thinking and shares many of our same values: the most important of which are protection of traders and the general public, compliance with Anti Money Laundering and Know Your Customer standards, and recognition of the innovation and importance of continued development in the Blockchain ecosystem.”
OKEx says it has already met with Maltese government and regulatory leaders to get a better understanding of the country’s evolving regulatory plans and provide feedback.
The move further establishes Malta as a growing hub in the cryptocurrency space. Currently, the country is in the process of setting up the Malta Digital Innovation Authority aimed at building a regulatory framework for blockchain technology, and by extension cryptocurrency, in the country.
OKEx and Binance are not the only Hong Kong–based exchanges that are looking to expand outside of Hong Kong. In recent weeks, Bitfinex, another major cryptocurrency exchange, announced it was moving to Switzerland.
Of all the countries, China has been the most heavy handed toward cryptocurrencies. Starting in September 2017, the People’s Bank of China completely banned initial coin offerings. Later, the country froze bank accounts associated with exchanges and began clamping down on bitcoin miners. In February 2018, it began taking measures to cut off one of the few remaining avenues for its citizens to buy cryptocurrencies.
Governed under the principal of “one country, two systems,” Hong Kong is both China and not China. The city reverted back to Chinese rule in 1997 under an agreement that Hong Kong would remain autonomous but that China would evaluate and revise the relationship moving forward. Since then, China has been slowly encroaching on Hong Kong’s sovereignty. Thus, businesses that choose to operate in Hong Kong could risk complications in the future if their models are banned in China, though still legitimate (for now) in Hong Kong.