Major cryptocurrency exchange Huobi continues to expand its global footprint by entering the British Virgin Islands, a British Overseas Territory.
Huobi officially announced on Friday that it has secured an investment business license from the Financial Services Commission (FSC) of the British Virgin Islands. The approval allows Huobi to operate a virtual asset exchange under its subsidiary Brtuomi Worldwide Limited (BWL).
According to the announcement, BWL plans to offer a range of cryptocurrency trading services, including spot trading of cryptocurrencies such as Bitcoin (BTC) and Ether (ETH), as well as derivatives trading.
The company is positioned as the first digital asset trading platform operator in the British Virgin Islands licensed to operate an institutional-grade crypto trading platform for both professional and retail investors.
“We believe this license will have significant implications for institutional investors, as it will make us the first exchange to provide compliant crypto derivatives products and trading services in the territory,” said Huobi Group Chief Financial Officer Lily Zhang, adding:
“Many institutional investors in the crypto industry operate outside of the British Virgin Islands, so we believe there is a big market opportunity there.”
Zhang noted that Huobi also holds a distributed ledger technology license in the territory of Gibraltar. Huobi Group does not have a specific timeline for when the services will expand to the rest of the UK, the CFO told Cointelegraph.
As well as becoming an officially regulated entity in the British Virgin Islands alongside the likes of Alameda Trust and Three Arrows Capital, BWL is also a member of the FSC financial innovation sandbox.
According to official FSC filings, BWL is the second FSC-approved sandbox participant alongside Structure Financial, a global trading platform that facilitates crypto-based investments and lending. The regulator created the sandbox in 2020 with the aim of supporting innovation in the growing fintech sector and allowing businesses to test new products and services.
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“Going forward, we will work closely with the British Virgin Islands regulatory authorities to develop a range of licensed products and services and promote the development of the territory’s cryptocurrency industry,” Zhang said.
The British Virgin Islands is one of the most important global destinations for cryptocurrency-related companies. According to data from PwC’s fourth annual Global Crypto Hedge Fund Report 2022, the British Virgin Islands has overtaken the United States as the second most popular location for crypto hedge funds.
In June, a court in the British Virgin Islands ordered the liquidation of Singapore-based venture capital firm Three Arrows Capital. The company is registered by the FSC as a professional fund, according to official figures.