TLDR

  • Victory Securities has permanently turned off trading and deposit features for users in Mainland China.
  • Users impacted by this can still withdraw their funds from the platform.
  • The brokerage firm’s choice is part of a multi-stage plan to separate its operations from Mainland China.
  • Financial regulators in Hong Kong have increased their oversight of virtual asset service providers.
  • Victory Securities intends to adhere to the regulatory requirements of both Hong Kong and China.

Victory Securities, a licensed crypto broker based in has formally cut ties with its Mainland Chinese clients. The firm disabled trading and deposit functions for mainland users following a gradual reduction over recent months. However, it reassured affected clients that withdrawals will remain available to recover their assets.

The broker’s decision comes amid growing scrutiny from authorities in both China and Hong Kong regarding virtual currency trading. This move aligns with the broader trend of heightened regulatory supervision in the crypto market. Victory Securities clarified that it will no longer allow mainland Chinese users to buy or trade virtual currencies on its platform.

Victory Securities Cuts Off Mainland Users

Victory Securities that it would permanently close buying and deposit functions for users residing in Mainland China. “The platform will only allow withdrawals for these users,” said the company in a statement.

This change marks the completion of a multi-phase strategy to distance its operations from the Mainland Chinese market. The company had previously halted new address certifications and restricted certain token purchases for mainland customers. Despite these restrictions, clients can still retrieve their funds, providing some relief to affected users.

Hong Kong Regulatory Pressure Intensifies

Hong Kong’s financial regulators have imposed tighter measures on (VASPs), including Victory Securities. This shift follows a series of actions by the People’s Bank of China (PBoC), which expanded its ban on offshore tokens and yuan-backed stablecoins.

Under Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), VASPs face strict liability if found “actively marketing” their services to mainland residents. With the rising risk of being caught in a regulatory crackdown, brokers like Victory Securities are compelled to ensure compliance with both Hong Kong and Mainland China regulations.

Chinese Authorities’ Growing Regulatory Reach

The increased scrutiny by Chinese authorities is partly in response to a rising number of illegal transactions linked to virtual currencies. A recent case in Anhui Province highlighted how scammers used virtual currency to facilitate fraudulent activities, such as money laundering.

The (HKMA) has moved forward with its Stablecoin Ordinance, which regulates stablecoin activities. This new framework further tightens the rules for brokers serving both local and international markets. Brokers now face higher pressure to keep mainland funds from entering Hong Kong’s financial system.