A report from Foresight News on June 27 reveals that Web3 companies in Hong Kong are laying out between 20 million and 200 million Hong Kong dollars, which is roughly $2.55 million to $25.5 million, to get their Virtual Asset Service Provider (VASP) licenses. According to insiders:
"Traditional financial institutions are starting from scratch without any existing infrastructure. They’ve had to build from the ground up in terms of products and teams, making the costs for VASPs quite steep. But even seasoned crypto firms find it’s still pretty pricey to get licensed."
I didnt get it so a web3 company spend 25 Million to buy a license that is expensive right but to be honest Hongkong is maybe become a crypto friendly country but why the china doesnt like crypto even banning it meanwhile the hongkong seems love about crypto
From what I can understand from the Google Translated version of the original article, "buying" is probably not the right choice for this[1]. The requirement to obtain the license is basically strict so exchanges and other firms need to fill that depending on what they lack. One of them is the RO position. I'm not sure if this is accurate or not, but this RO position is mandatory for the license, and finding a suitable individual is difficult, hence why most businesses entice people with high salaries. They also need to have offices, a certain amount of registered users, and so on. This is where the spending comes from. The Web3 firm mentioned here is basically an exchange. CMIIW.
[1] https://foresightnews.pro/article/detail/36091
I myself have not yet understood how these crypto companies will work and whether they will earn the money they spend, but there is always a risk that the laws will change when so many companies from around the world come to this market and business becomes as complicated as it is in the United States
Thanks for the info
Yeah united states have a problem with crypto basically SEC doesn't have the rule about the crypto industry and out of nowhere sues Binance.US , and Coinbase that basically a legal entity there. Meanwhile, Hongkong Dubai and even my country Indonesia has rule about crypto. If the US doesn't solve this problem the crypto industry will likely going move out from the US
Do you really think that the US regulator wants to kick all crypto companies to Singapore, Hong Kong, Europe or Indonesia?
Maybe they know that there will be a massive collapse of the crypto market, which they can easily provoke by starting new litigation with companies that mimic stablecoins.
That is not actually my opinion there is a podcast in youtube short that said Gary might drive the industry outside the united states there is actually bunch of videos about it from different people https://www.youtube.com/shorts/X9qw4fSz6mE
https://www.youtube.com/shorts/ef_gCDc_Rdc
https://www.youtube.com/shorts/YvC8nU3282A
and this https://www.youtube.com/watch?v=6vs7vquMlLI&t=271s a video
Yeah, I see similar arguments from those who disagree with how Gary runs the SEC. I would not be surprised if this is just another step to introduce their own regulatory framework in the near future. Maybe with the same cost or even cheaper compared to other countries to attract more business. I doubt they want to kill crypto or something similar. Capitalizing on it and earning more money from retail sounds like a better idea to me.
I don't understand what the SEC wants to achieve. From the fact that some crypto companies leave the United States, nothing will change in the industry.
The SEC is either playing the role of a manipulator or a useful idiot.
One of the vapriants. The price of bitcoin rises to 40-45 thousand dollars, there is euphoria in the market, there is news about the approval of the ETF, Gary is fired from the SEC. Hamsters buy bitcoin and then the price drops to 15-20 thousand.
I don't think the SEC wants to force all crypto firms out of the US. They are basically targeting to fully control it. They will keep attacking crypto businesses that have international influence and register new ones they can easily influence or manipulate. I don't also think that starting litigation with crypto companies will make the market collapse. The litigation against Coinbase and Binance affected the market, but it recovered immediately. I also think that the crypto industry has grown above any country. No nation can claim to be the bedrock of the industry. Even if the US bans cryptocurrencies, the market will still recover, an example is the case of China.
That is how much important that thing is to them. The legality and maintenance of their possible business and knowing that it's legal in Hong Kong and not in other countries. I think that goes to show how much is going on in the industry and how many people have that capacity to buy and procure licenses.
I don't think Coinbase will have problems in the US with the world's largest investment fund BlackRock behind them.
https://decrypt.co/147177/blackrock-spot-bitcoin-etf-filing-sec-coinbase-surveillance
For now, it looks like a redistribution of the market. When superfluous competitors are kicked out of the market, then regulation rules for all participants will immediately appear. And for new participants, entering this market will be difficult.
Web3 is a failed experiment. So I am not getting the point of spending so much money just for license. But I am sure the companies will have their own reasons to spend that much money.
One best part of doing business in countries like HK or SG, is their infrastructure and less regulatory burden. Also web3 has all potential to become another money laundering playground just like the NFT. So probably these companies are smelling opportunities there.
What they mean by web3 is basically exchange/broker service. The headline is probably using the web3 terms to attract more visits, but most of the discussion revolves around exchanges getting their licenses. The goal is obviously to retain users in HK so that they can keep making profits. Asia is a huge market, it is easy to understand why they want to spend money if it means keeping or increasing their profits for the foreseeable future. CMIIW.
Web3 technology in cryptocurrency is still in development. The technology for investors can and will be interesting, because the investor has the tokens on his wallet, and he can connect to various projects and it is enough to pass verification once with one of the licensed partners. But in such a situation, the trend is more important than the result