Hong Kong has recently proposed tougher laws for crypto exchanges, but that hasn’t stopped Standard Chartered and Hong Kong-based BC Group from launching a new cryptocurrency exchange.
The BC Group is the parent company of digital asset platform OSL. Standard Chartered is a multinational bank headquartered in London. Its venture capital arm SC Ventures is spearheading the new joint venture with the BC Group.
Their new unnamed joint venture will see them launch a digital asset brokerage and exchange platform for institutional and corporate clients in the UK and Europe.
“[The] new company will provide a brokerage and exchange platform to enable safe adoption and trading by the world’s largest and most demanding investors,” said Alex Manson, the head of SC Ventures.
The new cryptocurrency exchange is expected to launch in the fourth quarter this year, pending regulatory approval.
The news comes just weeks after Hong Kong’s Financial Services and Treasury Bureau (FSTB) published its conclusion on legislative proposals to enhance its anti-money laundering and counter-terrorist financing regulations.
Among other things, the new rules would bar bitcoin businesses from operating in Hong Kong unless they’re licensed by the city’s regulators and only provide services to professional investors.
Individuals must have portfolios of roughly $1.03m to be counted as professional investors.
Unlicensed and non-compliant cryptocoin companies would, if the new laws are implemented, be subject to fines of $644,054 and a prison sentence of up to seven years.
If they disregard the anti-money laundering and counter-terrorist financing requirements, then they could face a fine of $128,800 and up to two years in jail under the new rules.
Given the BC Group and Standard Chartered’s new joint venture will operate in Europe and only provide services to corporates and institutional investors, it is seemingly unlikely that it will be held back by the proposed new Hong Kong rules.
The new Hong Kong rules followed a Beijing crackdown on bitcoin, ethereum and other cryptocurrencies. China’s State Council’s Financial Stability and Development Committee has, for instance, released a document indicative of the country’s desire to curtail cryptocurrency mining and trading activities.
Following the committee’s announcement, three major Chinese financial institutions issued a statement pointing out that virtual currency “is not a real currency and should not and cannot be used as legal tender on the market.”