30/05/23

HONG KONG: Exchange Founder Warns of Crypto U-Turn.

As published on finews.asia, Tuesday 30 May, 2023.

The co-founder of China’s first Bitcoin exchange warned against excessive optimism on crypto in Hong Kong, suggesting the possibility of policy reversal in just a few years.

On June 1, Hong Kong will officially roll out its regulatory regime for the crypto market and begin issuing licenses for exchanges. Local authorities are making various efforts to push the city as a virtual asset hub, with Hong Kong Monetary Authority deputy chief Arthur Yuen calling on the financial sector to provide banking services to crypto-related firms.

But according to one Chinese crypto pioneer, optimism on the matter warrants caution.

"[T]he bigger picture is what happens in three years, five years," said Bobby Lee, co-founder of BTCC, China’s first Bitcoin exchange, in a Bloomberg interview. "I wouldn’t be surprised if Hong Kong did a reversal and put a red light in front of everyone".

Not unlike other areas in Hong Kong's financial sector, success will partly depend on demand from China which banned crypto trading in 2021.

"Hong Kong itself is a drop in the bucket," said Lee, who sold BTCC to a blockchain investment fund in the city in 2018 before later founding US-based crypto storage provider Ballet Global.

"The fantasy for exchanges is thinking that if officials let us get a license, then maybe they’ll start a sort of crypto-connect trading link with mainland China."