Chinese cryptocurrency entrepreneur Justin Sun’s recent U.S. fraud charges have raised concerns about the impact they could have on the plans of a digital asset exchange that he advises, according to Nekkei Asia.
Huobi Global, for which Sun serves as an adviser, had announced its intention to relocate its Asia headquarters from Singapore to Hong Kong and apply for a virtual asset service provider (VASP) license in the Chinese territory.
However, the U.S. Securities and Exchange Commission’s (SEC) recent civil suit against Sun and three of his companies, including the Tron Foundation, could potentially make it more difficult for the Hong Kong Securities Futures Commission (SFC) to approve Huobi’s VASP application.
Several lawyers have suggested that the allegation of past market misconduct could complicate Huobi’s application process, with the SFC being under notice to exercise extreme scrutiny. Sun, however, has dismissed the concerns, saying the U.S. fraud charges would have no effect on Huobi’s business plans in Hong Kong. A spokesperson for Huobi has also confirmed that there have been no changes to their plans.
Hong Kong is positioning itself as an Asian digital asset hub, with a licensing framework set to come into effect on June 1, 2023, that will allow retail investors to trade cryptocurrencies. Nevertheless, virtual assets listed on platforms require regulatory approval, and the SFC will consider the regulatory status of a VASP’s operations and virtual assets listed on its platform in other jurisdictions, not just Hong Kong.
Lawyers advising crypto companies on licensing matters have emphasized the need for VASPs to consider whether a virtual asset is subject to any pending regulatory or enforcement actions relating to its issuance before listing it for trading.
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This article was republished from azcoinnews.com