Fraud Charges Against Justin Sun Threaten Huobi’s Hong Kong License Application
Legal experts have expressed their concerns regarding the approval of Huobi's VASP license application
On March 27, Nikkei Asia reported that Justin Sun does not believe the U.S. fraud charges against him will affect Huobi Global’s license application in Hong Kong.
However, lawyers disagree, stating that the Hong Kong Securities and Futures Commission (SFC) may hesitate to approve a license under the current circumstances. The report suggests that allegations of past misconduct will result in “extreme scrutiny,” causing significant delays in the licensing process.
On March 22, the U.S. SEC unveiled fraud and unregistered securities charges against Sun and his companies, including the Tron Foundation, accusing them of manipulating the trading activity of Tron and BitTorrent cryptocurrencies. Additionally, the SEC considers TRON and BitTorrent cryptocurrencies as securities issued without registration.
Investors are at significant risk when crypto securities are sold without proper disclosure, as stated by Gary Gensler, the Chair of the SEC.
In addition, several celebrities were involved in promoting cryptocurrencies without disclosing their financial gain, but they have settled out of court without accepting any guilt.
Hong Kong has recently adopted a more favorable stance towards the crypto industry and is legalizing retail trading of cryptocurrencies on June 1.
Over 80 firms have shown interest in acquiring a Virtual Assets Service Providers (VASP) license in Hong Kong after the city-state established a licensing regime for VASPs. However, recent events may impact Justin Sun’s plan to relocate Huobi Global’s headquarters to Hong Kong and obtain a VASP license.