Hong Kong is attempting to attract crypto companies from mainland China as part of its efforts to enhance its position as a fina

Hong Kong is making a concerted effort to attract crypto companies to the city, despite the fact that some governments are distancing themselves from the cryptocurrency industry due to scandals and high-profile bankruptcies. Hong Kong's status as a finance hub has been tarnished by events elsewhere, but it is hoping to bolster its reputation by becoming an international virtual asset centre.

To that end, the city is holding 100 crypto-related conferences and lavish parties throughout April, and top government officials are touting their support for the sector. The chairman of Hong Kong crypto exchange HashKey, Xiao Feng, said that his company saw 13,000 people attend the first day of its Hong Kong Web3 Festival, the biggest conference of the month.

HashKey is one of two licensed crypto exchanges in Hong Kong, having received its license in November 2022. Xiao noted that many in the industry thought Hong Kong would inevitably adopt the same regulations as mainland China, which banned cryptocurrency trading in 2021. However, he said the government is now trying to emphasize Hong Kong practices different laws from mainland China under the "One Country, Two Systems" framework.

While many remain skeptical about the stability of Hong Kong's regulatory regime on cryptocurrencies, at least 10 companies with Chinese founders, including OKX, Bybit, and Huobi, have announced or are planning to announce their bid for licenses in the city, according to the firms and media reports. These companies are among the sponsors of the Hong Kong parties being held this week. Bybit held a private dinner for industry heavyweights, while OKX booked a rooftop venue with a vista over the entire Victoria Harbour.

Despite the enthusiasm, some remain cautious about the risks involved. One crypto venture capitalist, who declined to be named, said that he remained worried about Hong Kong's promises of a stable regulatory regime as China's crypto ban still looms large in the background. He noted that if Hong Kong can suddenly say that it is crypto-friendly as if it's a switch, that switch can be just as suddenly turned off should things get difficult.

At one event, crypto entrepreneur Justin Sun expressed his surprise at having such conferences on Chinese soil. While Sun has been charged by the US Securities and Exchange Commission with fraud, he said that the SEC's charges lacked merit and accused the regulator of targeting crypto players. Sun said, "Hopefully one day, we will have such events in Shanghai and Beijing."