Following Binance founder Changpeng Zhao’s admission that they do not comply with US money laundering laws, the world’s leading cryptocurrency exchange is facing uncertainties in the process of obtaining a crypto license in Hong Kong. Recent criminal complaints have complicated the process of obtaining a license in the country. Meanwhile, the exchange is also facing pressure from another regulator.
Elizabeth Wong, the Licensing Director and Fintech Head of the Securities and Futures Commission (SFC), raised critical questions regarding Binance’s license approval, causing the crypto world to closely monitor this negative development. This situation indicates an increase in uncertainties regarding Binance’s position in Hong Kong and deepening regulatory challenges.
Binance’s legal issues with US authorities, allegations of money laundering and sanctions violations, pose a significant obstacle to their goals in the Hong Kong market. While it has been indicated that their local subsidiary HKVAEX is preparing for a crypto license application, the strict requirements of the Securities and Futures Commission regarding anti-money laundering laws and the situation of sharing resources and extensive connections with Binance may complicate the situation.
In response to claims that Binance established HKVAEX to facilitate obtaining a license in Hong Kong, the company clarified that HKVAEX is an “independent” digital asset exchange and is not part of the “Company Group.” The complexity of this relationship will play an important role in determining the fate of Binance in Hong Kong’s crypto regulatory environment.
The newly appointed CEO, Richard Teng, will have a challenging task to enhance trust and tackle the negative perception in official institutions. In the coming days, the challenges that Binance will face will become clearer, and the steps taken by the new CEO will be closely monitored. Binance is facing a difficult process to erase past negative incidents.