Crypto companies in Hong Kong are under pressure after the fall of banking giants
- Cryptocurrency companies in Hong Kong face challenges after the fall signature bank (NASDAQ:) and Silvergate Bank.
- Local banks in the city are not willing to serve crypto companies.
- Companies are restricted, even unable to open local accounts in banks.
Recent reports have claimed that cryptocurrency companies in Hong Kong are under pressure following the debacle of two major financial institutions, Silvergate Bank and Signature Bank. According to the words of people familiar with the matter, local banks in Hong Kong refuse to serve crypto firms, leaving them unable to open local accounts.
Significantly, Joy Lam, partner at law firm Baker McKenzie, emphasized that even crypto firms licensed in Hong Kong face challenges, claiming:
The recent week’s abrupt closure of ‘cryptocurrency-friendly’ banks in the US affected a broad cross-section of our customers who are involved in virtual asset-related activities, both SFC-licensed and unlicensed.
Notably, Adrian Wang, CEO and founder of a global crypto-based wealth management firm, commented that although the city has advanced crypto regulations, with an aspiration to become a crypto hub, after the fall of the financial spheres, banks have become constrained in Crypto help companies.
Additionally, Wang posted that cryptocurrency-related businesses in the city that partnered with Silvergate Bank and Signature Bank are now in jeopardy, as they find it difficult to meet their financial requirements. She added:
Quite a few crypto funds and companies that we know of are seeking to find local banking partners in Hong Kong to do business with and [to] Prevent a SVB-style crisis from happening to them again.
Although Hong Kong’s current regulations for virtual assets have relief on the accompaniment of local banks and crypto companies, according to the city’s Monetary Authority, these financial institutions should have control over crypto companies.
Earlier, on March 8, financial services giant Silvergate Bank announced its sudden closure “in light of recent industry and regulatory developments.” Subsequently, its financial companion Signature Bank was closed by the New York Department of Financial Services (NYDFS).
It is clear that the closure of both banking companies has shattered the entire financial sector, with institutions and investors fearing industrial stability.
Cryptocurrency firms in Hong Kong have emerged under pressure after banking giants fell for their first coin issuance.