Both Tiger and Futu unveiled plans to offer crypto trading to customers outside of China

1 Jun, 2021 23:46
source: Singularity Financial

Singularity Financial Hong Kong June 1, 2021 –  Beijing-based Tiger Brokers and Shenzhen-based Futu both unveiled plans to offer crypto trading during their earnings calls, the South China Morning Post reported Tuesday. Both firms said they would only be targeting clients outside mainland China.

The Nasdaq-listed brokers have unveiled their new business plans during first-quarter earnings calls in the past month, joining western peers such as Robinhood in the US, and Israel’s eToro in attempts to turn volatile digital coins into mainstream assets.

Beijing’s war on cryptocurrency trading and mining has sent bitcoin plunging 40 per cent over the past month. But Chinese investors remain active in the crypto market, bypassing regulatory oversight by taking bets on domestic and foreign OTC desks.

OTC trading services is one of the two major ways for Chinese investors to enter the crypto market. Investors could set up an account on a foreign exchange, such as Coinbase, where they can buy crypto with fiat currencies or cash in on their crypto holdings. However, many Chinese investors are not able to go abroad and open such accounts due to the exchanges’ compliance requirements. That leaves OTC trading as the more common trading platform for Chinese traders.

Chinese regulators announced recently the country would take a stricter approach to bitcoin mining, with the People’s Bank of China prohibiting financial institutions from providing services to crypto companies. The management teams at both Futu and Tiger Brokers were quick to point out that the new bitcoin trading services would only target customers that are not based in mainland China.

“We’re in the process of applying for digital currency-related licenses in the U.S., Singapore and Hong Kong,” Robin Li Xu, senior vice president of Tencent-backed Futu, said on May 19.

Wu Tianhua, CEO of Xiaomi-backed Tiger, said on May 25 that the firm is applying for “relevant licenses” to offer crypto trading, without indicating specific markets.