BitMEX Rents World’s Most Expensive Skyscraper, Rising Status of Crypto Exchanges
Popular crypto exchange BitMEX, widely recognized for its Bitcoin and Ethereum margin trading system, has rented out the world’s most expensive skyscraper located in Hong Kong.
Experts have said that the expansion of BitMEX from Seychelles to Hong Kong demonstrates an improvement in the status of crypto exchanges as regulated financial institutions in a rapidly growing market.
Why Hong Kong Move is Monumental
Earlier this week, BitMEX rented out the 45th floor of the Cheung Kong Center, the most highly valued skyscraper in Hong Kong, the world’s most expensive real estate market. BitMEX will operate side by side with Goldman Sachs Group Inc., Barclays Plc, Bank of America Corp, and other major financial institutions which have operations based in the Cheung Kong center.
Over the past decade, despite its high base value, the price of properties and real estate in the Hong Kong market has continued to increase at an exponential rate due to the loophole in the country’s tax system that allows Chinese millionaires to transfer their wealth from the mainland to Hong Kong with virtually no taxes.
Chinese investors have been able to purchase properties in Hong Kong with low taxes for decades, as Hong Kong remains as one of the few regions which investors can freely move capital to and from China.
Recently, the Chinese government and local financial authorities have disclosed their intent to crackdown on millionaire investors that have hidden their wealth in bank savings, securities, insurance products and trust funds, outside of China to evade taxes.
But, the authorities have emphasized that it will still allow investors to invest in properties in overseas markets such as Hong Kong. Consequently, the Hong Kong real estate market started to see an influx of massive capital from China moving into its local real estate market.
“Home prices have picked up very fast in Hong Kong in recent months, and worries on the introduction of CRS was one of the drivers,” Jennifer Wong, an advisor and Taxation Working Committee co-convenor at The Association of Hong Kong Accountants, told SCMP in an interview.
More to that, the loophole in the real estate market of Hong Kong which enables Chinese millionaires to purchase properties with a 0.2 percent tax through shell companies, instead of a 12 percent tax for secondary properties, saving the rich a significant sum of money for property purchases in Hong Kong.
In a market that is fueled by an increasing demand from Chinese investors with declining supply due to its small land mass, the relocation of BitMEX to the most costly building in Hong Kong and the global real estate market can raise the status of crypto exchanges as highly profitable and regulated businesses.
Binance Increased the Bar
This year, Binance, the world’s largest cryptocurrency exchange, recorded a larger qurterly profit than Deutsche Bank, the biggest bank of Germany, with more than $ 300 million generated in the first quarter of 2018.
As exchanges in the crypto market continue to be recognized for transparent, regulated, and profitable operations, more large-scale financial institutions will eye the cryptocurrency industry.
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