OKX Wallet now supports WEMIX3.0 mainnet

Hong Kong’s Development as Crypto Hub May Soften Chinese Stance on CryptoHong Kong is making waves in the crypto sector that could potentially signal a shift in China’s attitude toward digital assets. That’s a theory that has been given consideration by crypto analytics firm Chainalysis in a recently released report highlighting Hong Kong’s crypto transformation and suggesting a growing tolerance for crypto within China’s corridors of power.Photo by farfar on UnsplashOTC trade showing resilienceDespite China’s stringent regulations and the ongoing crypto market downturn, Hong Kong’s over-the-counter (OTC) crypto market has demonstrated remarkable resilience, with a transaction volume of $64 billion in the past year. While this is slightly less than China’s $86.4 billion, it’s a noteworthy achievement considering Hong Kong’s smaller population and the challenges facing the crypto industry.The close relationship between China and Hong Kong has led some industry commentators to speculate that Hong Kong’s rise as a crypto hub could indicate a shift in China’s stance on digital assets.The crypto-friendly environment in Hong Kong has not gone unnoticed. Merton Lam of Crypto HK, an OTC digital asset trading center in the city, notes that cryptocurrencies have become an integral part of investment portfolios for banks, private equity firms, and high-net-worth individuals in the region. Even Chinese state-owned businesses are launching cryptocurrency-focused investment funds.Hong Kong cornering institutional tradeWhat sets Hong Kong apart in the crypto landscape is its proficiency in large institutional crypto transactions, with 46.8% of its annual crypto trades exceeding $10 million. In contrast, retail trades under $10,000 accounted for just 4% of the city’s crypto volume, slightly below the global average of 4.7%. This institutional dominance distinguishes Hong Kong from other Asian regions.For comparison, South Korea heavily relies on retail trading on centralized exchanges, while Japan maintains a transaction breakdown that aligns closely with global trends, balancing centralized exchanges with DeFi protocols.A cautionary noteHowever, Dave Chapman of OSL Digital Securities offers a note of caution, suggesting that Hong Kong’s promotion as a crypto hub might be more exploratory, aimed at gaining a better understanding of digital assets without significantly loosening mainland policies.Despite the uncertainties, Markus Thielen, Head of Research and Strategy at Singapore’s Matrixport, believes that Hong Kong is acting as a “testing ground” for broader cryptocurrency adoption in China. The city’s unique position makes it an attractive destination for the crypto asset management industry, setting it apart from other jurisdictions that often view crypto firms as service providers rather than end-users.Hong Kong’s progress is particularly noteworthy when considering the broader context of East Asia’s crypto market. Chainalysis analysis reveals that East Asia’s share of crypto transaction value dropped from around 30% in 2019 to less than 10% by the second quarter of 2022 due to China’s crypto bans. Hong Kong’s recent surge could potentially act as a “tailwind” to reignite crypto activity in the region.The evolving relationship between the mainland and the autonomous territory of Hong Kong may hold the key to understanding the future of cryptocurrency in the region.

The Hong Kong Securities and Futures Commission (SFC) announced plans to conduct on-site inspections of local virtual asset trading platforms (VATPs) that are still in the process of regulatory applications after the June 1 licensing deadline. The SFC has emphasized that starting from June, all local crypto trading platforms must either possess a license or be deemed-to-be-licensed to operate legally. Operating an unlicensed VATP post-deadline will be considered a criminal offense, with the SFC actively pursuing compliance.Photo by farfar on UnsplashFocus on compliance and market adjustmentsThe inspections aim to ensure adherence to regulatory standards, particularly in safeguarding client assets and executing Know Your Customer (KYC) processes. The SFC has advised investors to only engage with licensed platforms and cautioned unlicensed companies against marketing their services or accepting new retail clients. Amidst these regulatory changes, the number of license-seeking crypto exchanges has declined. Notably, 11 firms, including OKX and Huobi's local branch, have retracted their licensing applications, leaving 18 still pending. Meanwhile, Gate.HK has halted certain operations in anticipation of meeting the new regulatory demands. To date, only two companies, OSL Digital Securities Limited and Hash Blockchain Limited, have secured a license to operate under the new framework in Hong Kong. 

Crypto.com, the Singapore-headquartered cryptocurrency exchange platform, has outlined that it has seen significant growth thanks to high-profile sports sponsorship and advertising. Reaping the rewardsThe company has established advertising partnerships with Formula 1 (F1) motor racing and the Ultimate Fighting Championship (UFC). These lucrative sponsorship deals have propelled the exchange into the spotlight of two massive fan bases, contributing to its expansion. In an interview with Cointelegraph last week, Eric Anziani, president and chief operating officer of Crypto.com, discussed the company's successful advertising campaigns with F1 and the UFC, as well as its naming rights deal for the Crypto.com Arena in downtown Los Angeles. In 2021, what was then the Staples Center was renamed to the Crypto.com Arena in a $700 million naming rights deal. Anziani expressed gratitude for these partnerships, emphasizing the importance of staying top of mind for users in the competitive cryptocurrency market.  That same year, the company signed a multi-year partnership deal with leading French football club Paris Saint-Germain (PSG), rolling out various PSG-related marketing activities since then.Photo by Austin Loveing on UnsplashBrand recognition benefitsMarket surveys conducted by Crypto.com indicate a high level of global awareness and brand recognition among retail cryptocurrency users. The exchange's logo prominently displayed during F1 races and UFC events has helped it reach millions of fans worldwide. ESPN reports an average of 1.11 million viewers per race for the 2023 F1 season in the United States alone, with global viewership exceeding one billion over the entire race calendar. Similarly, the UFC boasts a global audience, with some of its biggest fights attracting millions of pay-per-view viewers. Anziani highlighted the effectiveness of these partnerships in bringing people into the cryptocurrency space.  User base approaching 100 millionThese partnerships have significantly contributed to Crypto.com's growing user base, which is approaching 100 million users in 2024, up from an estimated 80 million in the previous year. Anziani discussed the factors that drive users' choice of exchange platforms, emphasizing the importance of compliance, security, convenient access to cryptocurrency and competitive fees. He noted that different users prioritize different aspects based on their trading preferences and requirements. The firm is not alone in pursuing high-profile sports sponsorship deals. Rival platform OKX has an ongoing sponsorship deal in place with Manchester City Football Club in the English Premier League (EPL). It also has doubled down recently on the sponsorship of F1 racing team McLaren. Other notable partnerships include crypto gambling platform Stake.com’s sponsorship of Sauber F1, crypto exchange platform Kraken’s deal with Williams F1 and BingX’s sleeve sponsorship agreement with Chelsea football club in the EPL. High-profile marketing initiatives are alive and well, although in a much more sober way than in 2022 when six crypto companies featured in Super Bowl advertising in the United States. Kraken’s chief marketing officer, Mayur Gupta, recently stated that the Super Bowl is no longer an effective means of promotion for crypto companies.