The survey found that around 95% of these companies had attempted to open local bank accounts, but only 20% managed to do so within two to five months.
Hong Kong Legislative Council member Johnny Ng has called on the government to ease the strict restrictions that many crypto and Web3 firms face when trying to access banking services. Ng, a vocal advocate for the region’s development as a crypto hub, expressed concerns that these obstacles are hampering the sector’s development.
Ng’s appeal comes as a response to persistent challenges faced by crypto firms in opening local bank accounts in Hong Kong. He stated on X that the difficulties in securing banking services are “hindering their ability to conduct business effectively”.
Notably, a recent survey conducted by Ng’s team, which included over 120 crypto and Web3 firms that have established themselves in Hong Kong since 2022, paints a concerning picture.
An Alarming Situation
The survey found that around 95% of these companies had attempted to open local bank accounts, but only 20% managed to do so within two to five months. Alarmingly, over half of the firms reported that the process took more than six months, with many being asked to have their shareholders or directors visit Hong Kong multiple times to complete the process.
Ng proposes several measures to address these issues, including the creation of a “virtual asset/digital asset bank” and the development of a more flexible banking system that could operate alongside traditional banks.
Ng also noted the need for Hong Kong to accelerate the development of its Web3 ecosystem, stating:
“Currently, virtual asset policies have become the focus of global government discussions. If we want to become the Hong Kong Web3 center, we should promote the development of the entire chain and ecosystem as soon as possible.”
Later in July, Ng also suggested the government include bitcoin in the country’s financial reserves.
Strict Regulations on Crypto Exchanges
Ng’s concerns echo those of other lawmakers, such as Duncan Chiu, who have criticized the “excessively stringent” regulations imposed on crypto exchanges. Chiu argued that these tough rules have driven major global exchanges away from Hong Kong, hindering the region’s potential as a global crypto hub.
The Securities and Futures Commission (SFC) in Hong Kong implemented a licensing framework for centralized cryptocurrency exchanges in 2023. This new regulation mandates that exchanges secure a license and meet strict requirements, including adhering to anti-money laundering (AML) protocols and consumer protection standards. In response to these tough regulations, several global exchanges, such as OKX and HKX, have stopped their operations in Hong Kong.
In July, the SFC issued a warning about seven cryptocurrency trading platforms, including Taurusemex, Yomaex, Bitones.org, BTEPRO, CEG, XTCQT, and Bstorest. These platforms were flagged for conducting business in the region without the necessary licenses.
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