Hong Kong Aims to Become a Leading Global Center

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When it was discovered that Bittrex, a cryptocurrency exchange with headquarters in the United States, had broken the law by operating as an exchange, broker-dealer, and clearinghouse without being registered with the regulator, the SEC issued a notice of potential action to the company. According to Bittrex’s general counsel, David Maria, by the time the company received the notice, it had already begun closing down its U.K. operations. According to a Wall Street Journal article published on April 16, the enforcement section of the U.S. Securities and Exchange Commission (SEC) is leaning towards recommending that the organization sue Bittrex for suspected investor protection violations. If the agency decides to take action, the SEC is allegedly examining the option of filing a lawsuit, barring regulators from making a fair settlement offer. The Office of Foreign Assets Control and Financial Crimes Enforcement Network of the US Department of the Treasury has previously imposed financial penalties on Bittrex.

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With the Bank of Communications and ZA Bank serving as settlement banks, Hong Kong is attempting to establish itself as a global center for cryptocurrency by issuing bank accounts for licensed cryptocurrency businesses. The Wall Street Journal reported that the bank is negotiating to open accounts for regulated businesses. Two cryptocurrency funds have been formed by the Chinese government-backed CPIC Investment Management, one of which is targeted at institutional investors. The banks will make it easier to deposit and withdraw fiat money and will also provide Bitcoin firms account services. Additionally, the city wants to work with additional cryptocurrency businesses in 2023.

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