Victory Securities Cuts Off Mainland China Users Amid Regulatory Pressure

TLDR

• Victory Securities has permanently disabled trading and deposit functions for Mainland China users.
• Affected users can still withdraw their funds from the platform.
• The broker’s decision is part of a multi-phase strategy to distance itself from Mainland China.
• Hong Kong’s financial regulators have intensified scrutiny on virtual asset service providers.
• Victory Securities aims to comply with both Hong Kong’s and China’s regulatory requirements.

Victory Securities, a licensed crypto broker based in Hong Kong, has officially severed ties with its Mainland Chinese clients. The company disabled trading and deposit functions for mainland users after a gradual decline over recent months. However, it reassured affected clients that withdrawals would remain available to recover their assets.

The broker’s decision comes amidst increasing scrutiny by authorities, both in China and Hong Kong, over virtual currency trading. This move aligns with the broader trend of heightened regulatory oversight in the crypto market. Victory Securities clarified that it would no longer allow mainland Chinese users to buy or trade virtual currencies on its platform.

Victory Securities Cuts Off Mainland Users

Victory Securities announced 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 virtual asset service providers (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 Hong Kong Monetary Authority (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.

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