Regulatory Alert! FTX exchange headquarters moves from Hong Kong to the Bahamas, spokesperson says: Priority is given to offices without travel restrictions.

A compliant framework that meets the needs of the cryptocurrency industry has yet to be developed. On the 24th, China once again announced a ban on mining and measures to prevent and deal with cryptocurrency speculation. Despite the unchanged content, it had the same effect, causing a short-term decline in the overall market, with over a 5% drop in the top ten market values of stablecoins. FTX, a Hong Kong-based exchange, has long been preparing to reduce regulatory risks in China. After announcing on the 20th that its headquarters will be located in the Bahamas, the exchange revealed further details on its compliance roadmap in an interview with Bloomberg on the 24th.

FTX Establishes Regulated Headquarters in the Bahamas

FTX announced on the 20th that its subsidiary, FTX Digital Markets, registered in the Caribbean island nation of the Bahamas, is regulated by the country's securities commission, in compliance with the comprehensive digital asset regulatory framework known as the DARE Act. FTX believes this move will facilitate a broader range of digital business activities and allow for platform expansion in a compliant manner. Founder SBF stated that FTX Digital Markets will serve as the headquarters for FTX and has appointed the former head of OTC at Alameda Research as the CEO of the company.

SBF stated on Twitter here: "The Bahamas is one of the few places to have a comprehensive regulatory framework for cryptocurrencies, and FTX is registered there." Due to the absence of COVID-19 and quarantine measures in the Bahamas, SBF plans to continue traveling around the world even after settling there.

FTX Spokesperson Natalie Tien: Prioritizing Offices with No Travel Restrictions

With increased regulatory scrutiny on the cryptocurrency industry in both China and the United States, operators face operational risks in securities, commodities futures, lending, anti-money laundering, and tax compliance where there are no clear regulations or the existing ones do not align with reality. The relatively open regulatory framework in the Bahamas has made it a favorable location for FTX.

FTX spokesperson Natalie Tien told the media here: "We are committed to working closely with local regulatory authorities to promote the development of the cryptocurrency industry and will continue to provide a secure, trustworthy, and compliant exchange for all customers." She mentioned that as various jurisdictions introduce comprehensive cryptocurrency regulatory regimes, FTX will actively participate. Additionally, FTX is prioritizing offices without travel restrictions.

Early Signs of Departure from Hong Kong

FTX, founded by the American SBF, had its headquarters in Hong Kong. In May of this year, FTX preemptively banned new local users who were non-professional investors due to local regulations.

Last year, Hong Kong conducted a public consultation on amending the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, which was completed on May 21 of this year. This included the "Licensing Regime for Virtual Asset Service Providers," which stipulates that licensed virtual asset service providers can only serve professional investors and must adhere to strict guidelines to determine which virtual assets can be traded on their platforms.

Obviously, this did not align with FTX's operational needs.

China's Ban Impacting Platform Tokens

Looking at the performance of exchange platform tokens on the 24th, HT, OKB, and GT experienced double-digit daily declines, particularly in response to regulatory news from China. Expanding the timeframe to the 30th, only FTT, CRO, and LEO showed growth, which is less related to recent news from China.

Using the traffic analysis tool SimilarWeb, it is observed that the platforms with the most traffic from China, namely Huobi and OKEx, also experienced the highest daily declines in platform tokens.

In fact, many exchanges issuing platform tokens have a majority of Chinese origins or employees, with the consideration of whether they have expanded internationally or not, relocated their operational headquarters to Hong Kong, Singapore, or remained in Beijing, and registered in overseas jurisdictions, among other factors.