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Hong Kong has<\/span> an on-again-off-again relationship with crypto: Before China outlawed all crypto-related activities<\/a> in 2021, the Asian financial hub was the early home to several crypto startups, including the now-defunct FTX, which left for the Bahamas<\/a> after the ban. Now, Hong Kong is again welcoming crypto businesses, only this time with more regulatory clarity.<\/p>\n During its government-backed fintech week late last year, Hong Kong indicated<\/a> its intention to legalize crypto retail trading and introduce a licensing regime for digital asset providers. The plan took more shape in February when the city published draft rules<\/a> that would allow individual investors to trade certain major cryptocurrencies starting June 1.<\/p>\n Companies are already responding to the city\u2019s shift in attitude. As of February, the department for foreign direct investment had received \u201cexpressions of interest\u201d<\/a> from over 80 virtual asset-related companies from both mainland China and abroad in establishing a presence in Hong Kong. KuCoin, one of the world\u2019s largest crypto exchanges, already said<\/a> last year that it would open an office in the city.<\/p>\n While these developments are encouraging signs to some, others question whether the semi-autonomous region has the right conditions for building all forms of web3 organizations and businesses to thrive. The early consensus is that crypto-trading-related firms will probably be the first to reap the fruit of the policy change.<\/p>\n When Hong Kong was handed back to China in 1997, Beijing established a \u201cone country, two systems\u201d regime that granted the city a high level of autonomy in the legal, economic and social realms. Export-oriented Chinese firms began using the city as a logistics and clearing center, and multinationals set up shops there as their gateway into China.<\/p>\n In recent years, however, Hong Kong is increasingly losing its allure as a springboard connecting China and the outside world after episodes of political fallout and stringent COVID controls.<\/p>\n<\/p><\/div>\nToo big to miss<\/h2>\n