Amber, Japanese cryptocurrency platform, has decided to move its operations out of Japan due to the country’s rigorous regulatory policies in the digital asset sector. Instead, the platform now seeks a license in Hong Kong, a region that has earned a reputation for being more accommodating and flexible to crypto-related firms.
Over the past few years, Japan has witnessed the implementation of some very stringent regulations concerning cryptocurrencies. One such regulation includes the licensing requirement for operating an exchange in the country, which was introduced after the infamous Coincheck hack in 2018. While this move aimed to minimize fraudulent activities and protect investors, it inadvertently caused an exodus of several crypto-related companies from the nation. As a consequence, the Japanese economy started losing its position as a global innovation hub for blockchain technology and cryptocurrencies.
In this context, Amber’s decision to move its operations to Hong Kong comes as no surprise. The Special Administrative Region has been continually working to balance its regulatory framework and maintain an innovative environment that fosters the growth and development of blockchain technology.
As it stands, Hong Kong’s Securities and Futures Commission (SFC) offers more comprehensive and practical regulations for cryptocurrency firms compared to the Japanese counterpart. As a result, a growing number of companies are considering Hong Kong as an optimal location for their crypto operations. Amber, a renowned platform known for offering trading, custody, and asset management services for crypto-assets, is one such firm.
Established in 2017, Amber Group has quickly gained global recognition as a provider of integrated crypto finance solutions. The platform has successfully tapped into a vast user base that includes miners, exchanges, wallets, and token issuers. Amber boasts of its robust security measures that ensure the safe management, transportation, and storage of users’ digital assets.
Amber’s license-seeking endeavor in Hong Kong is directed towards obtaining the requisite permissions to facilitate its operation as a licensed virtual asset platform in the territory. The SFC introduced a crypto trading rulebook back in November 2020, which provided a clear framework for firms to operate under specific regulatory requirements. Among other requisites, the companies are expected to follow strict anti-money laundering (AML) and counter-terrorism financing (CTF) policies and adhere to the ‘fit and proper’ criteria.
It is worth highlighting that Amber’s application for a license in Hong Kong is one of many consequential moves the firm has made towards expanding its presence in the global crypto finance industry. In March 2022, Amber announced the securing of $200 million in a Series B funding round led by investment Giant Tiger Global Management, valuing the firm at a staggering $1 billion.
The company has been steadily growing its user base and broadening its offerings over the years. Amber focuses on providing its clients with innovative and tailored investment strategies, which include algo trading, structured products, derivative strategy trading, lending, and yield enhancement. These services cater to the retail and institutional segments, hedging against potential risks and ensuring maximum returns.
Amber has also made notable strategic collaborations in recent times, such as partnering with Hex Trust, an Asia-based cryptocurrency custodian, to expand its asset management services. Moreover, the firm has received significant institutional backing, including from established entities like China Renaissance, Pantera Capital, and Polychain Capital.
As the crypto finance ecosystem continues to evolve, companies like Amber Group aim to become synonymous with secure, compliant, and innovative cryptocurrency and blockchain solutions. The platform’s recent move to exit Japan and seek a license in Hong Kong could significantly impact the crypto finance landscape in both territories.
It remains to be seen as to what extent Amber’s relocation to Hong Kong will influence the digital asset industry in Japan. Should other firms decide to follow suit, Japan could face adverse consequences in terms of both economic and innovative growth in the cryptocurrency sector.
As global market players look for strategic locations to conduct their operations, regulatory clarity and flexibility have become essential factors while choosing a jurisdiction. While Japan boasts of its advanced technology, its strict regulatory environment is driving away potential innovators in the crypto space.
In conclusion, Amber’s move to Hong Kong signifies the urgent need for Japan to reconsider its approach to cryptocurrency regulation. To maintain its position as a global hub for technology and innovation, Japan must strike a balance between fostering industry growth and ensuring the security and compliance of the digital asset space.