Huobi plans to expand into Hong Kong after laying off 20% of its staff

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Digital currency exchange Huobi Global is eyeing a push into Hong Kong as part of its latest expansion strategy. Despite massive job cuts at the start of 2023, the embattled exchange hopes to ride the optimistic wave of Hong Kong’s decision to transform itself into a hub for digital assets.

Huobi’s top executive Justin Sun disclosed the exchange’s plan on Twitter, noting that the platform will apply for a digital currency trading license in the coming weeks. The permit, issued by the Securities and Futures Commission (SFC), will allow Huobi to provide digital currency services to Hong Kong’s 7.4 million residents.

Big news for crypto today: @HuobiGlobal has announced that it's applying for a crypto trading license in Hong Kong🇭🇰! This is a major step for the major cryptocurrency exchange and a sign of its continued commitment to operating in a compliant and regulated manner. 🇨🇳

— H.E. Justin Sun🌞(hiring) (@justinsuntron) February 20, 2023

“This is a major step for the major cryptocurrency exchange and a sign of its continued commitment to operating in a compliant and regulated manner,” said Sun. “This is great news for traders and investors who are looking for a trusted and reliable platform to buy, sell, and store digital assets.”

Sun revealed that Huobi will be creating a new entity in the region to be known as Huobi Hong Kong. The new exchange will focus on institutional investors and high-net-worth individuals in the city-state, with Sun rippling with confidence that all local regulations will be complied with.

The proposed expansion into Hong Kong has raised eyebrows given Huobi’s decision to lay off 20% of its staff at the start of the year. Insider reports suggested the exchange was going through a rough patch as several employee end-of-year perks were suspended.

With the planned expansion, Sun suggests that Huobi could increase its staff strength in Hong Kong by over 150%. There are also unconfirmed reports that the exchange is mulling over changing its headquarters from Singapore to Hong Kong.

Hong Kong’s allure for virtual currency firms

Huobi remarked that it is “stoked about Hong Kong’s pro-crypto policies” in recent times that have served as the primary motivating factor to seek a license. On multiple occasions, Hong Kong’s government has declared its intention to be the leading jurisdiction for digital assets, going on to work on a new legal framework to control the industry.

The SFC recently called for a public consultation on the new licensing regime to engage with relevant stakeholders in the space. Despite its lofty ambitions, the SFC remains keen on ensuring investors are protected under the new rules.

“As has been our philosophy since 2018, our proposed requirements for virtual asset trading platforms include robust measures to protect investors, following the ‘same business, same risk, same rules’ principle,” said the newly appointed SFC CEO Julia Leung.

Watch: The Future of Digital Asset Exchanges & Investment