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OKX has announced its plans to comply with the latest regulations set forth by Hong Kong’s crypto rulebook. The information was shared by Lennix Lai, the company’s Global Chief Commercial Officer, during a candid interview with Bloomberg’s Annabelle Droulers.
After 6-years of continuing hard work, lobbying and communication by the industry, crypto is live in HK today.#OKX is ready#SFC #VASP @bitcoinorghk @finoverse_ #digitalasset pic.twitter.com/Lcl1bLn1up
— Lennix Lai (@LennixOKX) June 1, 2023
Lai revealed that OKX had been preparing for the application process for nearly a year, involving in-depth discussions with external consultants, and is on track to complete the necessary paperwork by the end of the year. The company has also invested in dedicated personnel, with a 60-person team working on the regulatory licence, as well as local technology and compliance staffing.
The Investment and Potential ROI
While Lai refrained from disclosing the exact amount invested in meeting the Hong Kong regulations, he did reveal it involved a substantial allocation of resources and manpower. In terms of ROI, he expressed confidence in the company’s decision to comply with the stringent regulations. He believes this move will attract more traditional investors, thanks to Hong Kong’s sophisticated financial framework.
Navigating the Expensive, Yet Promising Hong Kong Market
Setting up in Hong Kong, while costly, is a calculated risk for OKX. The hope lies in the possibility of China eventually lifting its ban on crypto trading, thereby opening a significantly larger market for the company. In addition, the license extends beyond just crypto, potentially opening up opportunities for other forms of virtual assets and broadening the business spectrum.
Anticipating the Next Phase of Regulations
Lai expressed hope for the next phase of regulations, particularly in terms of education and improved understanding between regulators and the current players in the industry. He suggested the possibility of direct communication with the regulators in the future, aiming to build trust and understanding.
OKX has been in discussions with at least ten local banks in Hong Kong, hoping to facilitate banking access within the regulatory regime. Despite challenges, such as reluctance from banks to open accounts, Lai notes that the tone of the conversations has been quite positive. However, there is still some way to go before a client-access account can be opened.
Lastly, Lai was asked about his outlook on crypto assets for the coming months. He noted that the crypto market continues to be heavily influenced by the macro economy and doesn’t anticipate a significant impact from the Hong Kong move until banking access is granted, possibly a year later.
Could the challenges brought by new Hong Kong regulations ultimately pave the way for expansion and growth opportunities for crypto exchanges like OKX?
As OKX commits to the Hong Kong market, could this signal the beginning of an industry-wide shift in focus towards the region?