FalconX, a digital-assets prime brokerage, is expanding into Hong Kong as the region’s institutional demand for crypto assets rises, the company said.

In a Thursday statement, the company said it plans to offer over-the-counter brokerage and crypto derivatives services to professional investors in Hong Kong. Such professional investors include proprietary trading firms, family offices and fund managers.

"Hong Kong has historically been a hub for virtual asset innovation, and continues to lead the market with a clear focus on Web 3.0,” Matt Long, APAC general manager of FalconX, said in the statement. “FalconX is well positioned to grow as Hong Kong’s advanced virtual asset and OTC derivatives regulatory frameworks continue to evolve.”

The Hong Kong expansion comes after FalconX expanded to Singapore in February 2023 to tap the APAC market.

Unlike its neighboring Chinese mainland’s broader crackdown on crypto trading and mining, Hong Kong rolled out the welcome mat for crypto firms last year. In June 2023, Hong Kong officially started its crypto licensing regime for virtual asset trading platforms, allowing licensed exchanges to offer retail trading services. Hong Kong has granted licenses to two platforms — HashKey and OSL.

Many global exchanges have applied for such retail trading licenses. The Securities and Futures Commission’s list of license applicants includes Bybit, OKX, Huobi HK, Crypto.com and Bullish. Binance reportedly set up a trading platform in Hong Kong called HKVAEX to apply for the license, according to local newspaper The South China Morning Post.

Earlier this week, Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, said that the government would work towards submitting licensing bills for stablecoin and over-the-counter crypto trading frameworks as soon as the consultations progress.

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