A recent report by SCMP indicates that Binance is affiliated with HKVAEX, a recently founded trading platform based in Hong Kong. The report indicated that HKVAEX, launched in February after its establishment in December 2022, has been a strategic maneuver by Binance to pursue a virtual asset trading license in Hong Kong.
The report citing anonymous sources close to the matter affirmed that HKVAEX and Binance share resources ranging from technical infrastructure to human capital. HKVAEX operates under the corporate banner of BX Services Limited, a separate Hong Kong-based entity. Notably, HKVAEX’s website fetches its content from Binance’s servers, a significant detail highlighting its shared infrastructure. Moreover, both companies have appeared jointly at several events in Hong Kong, including an educational workshop on cryptocurrencies conducted at the University of Hong Kong. Additionally, their main websites exhibit similar templates, pointing to a shared set of legal resources.
License ambitions amid regulatory changes
The revelation of this affiliation comes at a time when HKVAEX is preparing to apply for Hong Kong’s virtual asset trading license. As per an interview with Stanley Fung, the CEO of HKVAEX, the company is in the final stages of its application preparation. The entry of HKVAEX into the licensing fray is significant as Binance has been relatively silent about its intentions in Hong Kong despite the city’s attempts to attract industry players by offering regulatory stability.
This licensing scheme had been announced a year ago and has been a magnet for several China-connected exchanges. Binance, however, had remained noticeably quiet on this front. Furthermore, Binance has been facing increased scrutiny and legal issues abroad, making its indirect entry into Hong Kong via HKVAEX a strategic move to diversify its regulatory positioning.
Both companies have been elusive about the full extent of their affiliation. While HKVAEX has communicated through email that it is “an independent virtual asset exchange platform operated by a team of technology and seasoned professionals,” Binance has also been cautious with its public statements. According to a Binance representative, HKVAEX is “not in the Binance Group of companies.” However, these statements do little to quell the intensifying speculation surrounding their relationship, especially considering their multiple joint appearances at Hong Kong events.
It should also be noted that these revelations about the Binance-HKVAEX affiliation have surfaced amid Binance’s challenges abroad, which include legal battles and withdrawal from various European markets. Given these challenges, Binance’s discreet strategy for entering the Hong Kong market through its affiliation with HKVAEX seems to be a calculated move to mitigate risks and seek new opportunities.
While both Binance and HKVAEX continue to maintain their operational independence, the shared resources and timing of HKVAEX’s license application process suggest a deeper, strategic relationship.