Cryptocurrency exchange giant Binance appears to be strategically maneuvering to gain access to the Hong Kong market by establishing a separate local entity called HKVAEX. Though Binance itself cannot directly operate in Hong Kong, the South China Morning Post reported that it is the driving force behind the newly launched HKVAEX exchange.
Despite HKVAEX insisting it is an independent company, it reportedly shares numerous resources with Binance. Most notably, the two companies have very similar logo designs. Additionally, HKVAEX’s social media accounts only follow Binance’s official handles and CEO Changpeng Zhao, suggesting close ties. Stanley Fung, HKVAEX’s CEO, previously led operations for cryptocurrency exchange Huobi in Hong Kong until late 2022, when he departed around the time Justin Sun entered Huobi’s management.
By creating HKVAEX as a legally distinct entity based in Hong Kong, Binance could gain strategic access to the local crypto market. This would allow Binance to benefit from HKVAEX’s regional operations without directly flouting local regulations that restrict Binance itself. It aligns with Binance’s pattern of exiting markets like Canada when faced with new regulatory barriers.
In contrast to Binance’s lack of transparency regarding Hong Kong plans, HKVAEX is actively preparing to apply for one of the new virtual asset licenses introduced by Hong Kong regulators earlier this year. The licensing scheme has sparked enthusiasm among crypto companies seeking to establish regional footholds. HKVAEX insists it is fully independent of Binance, but multiple collaborations between the two companies have been highlighted, including a promotional campaign describing Binance as a “partner.”
The move could help Binance circumvent the growing regulatory scrutiny it has faced in jurisdictions like the United States. Regulators have targeted both Binance and its CEO Changpeng Zhao with sweeping lawsuits related to activities like stablecoin issuance and securities trading. If HKVAEX succeeds in gaining licensed access to Hong Kong, it may prove a clever strategic workaround for Binance.
