The cryptocurrency market, once defined by its decentralized and anonymous nature, is witnessing a significant shift. A new wave of participants—traditional brokerages like Guotai Junan International and Futu—are entering the space with official licenses and regulatory backing. These firms are leveraging brokerage intermediary models to offer crypto asset trading, often relying on compliant custody solutions such as Hashkey.
This development raises a critical question: why would seasoned crypto traders, accustomed to platforms like Binance and Coinbase, switch to traditional brokers? Why go through the hassle of submitting documents like long-term overseas visas or Hong Kong/foreign identity cards, and potentially face cross-border tax compliance risks?
The Identity Shift: From Anonymity to Endorsement
The core appeal of cryptocurrencies has always included anonymity and privacy. Early adopters used wallet addresses to avoid regulatory scrutiny, and even today, mainstream platforms implement KYC (Know Your Customer) for "limited real-name" verification. The desire for privacy remains strong—after all, who doesn’t want to keep their asset movements private?
However, as digital assets transition from niche investments to mainstream wealth management tools, a new need is emerging: official recognition. Just as real estate investors rely on property deeds and stock traders use securities accounts, crypto investors now seek validation from traditional financial systems. This isn’t a betrayal of anonymity but a step toward legitimizing their assets.
The Competitive Edge of Traditional Brokers
Licensed institutions like Guotai Junan International and Futu offer distinct advantages over crypto-native platforms such as Binance:
- Official Asset Verification: Through compliant custodians like Hashkey, users’ crypto holdings are integrated into traditional financial clearing and settlement systems. This verifiable proof of assets is crucial for high-net-worth individuals—whether for loan collateral, inheritance planning, or wealth reporting. An asset statement from a licensed broker carries more weight than a wallet screenshot.
- Compliance Safeguards: While cryptocurrencies are globally accessible, cashing out involves anti-money laundering (AML) and tax reporting complexities. Licensed brokers provide structured channels for cross-border fund flows, reducing regulatory risks (though users must still handle their own tax obligations).
- Integrated Wealth Management: For comprehensive firms like Guotai Junan and Futu, crypto is just one piece of the puzzle. Future integration with stocks, funds, and insurance could enable seamless multi-asset allocation—a level of convenience vertical crypto platforms struggle to match.
Rational Decision-Making: Matching Needs to Solutions
Opting for a traditional broker isn’t without hurdles: preparing overseas documentation, navigating tax compliance, and adapting to more complex processes can be daunting. Yet, for certain groups, these costs are justified:
- High-Net-Worth Investors: Those needing to incorporate crypto into broader wealth management strategies, including tax planning and legacy structuring.
- Compliance-Conscious Users: Individuals prioritizing regulatory oversight to mitigate future legal risks.
- Multi-Asset Traders: Users seeking a unified platform for both traditional and crypto investments.
👉 Explore compliant trading solutions
Frequently Asked Questions
Why are traditional brokers entering the crypto market?
Traditional brokers recognize the growing demand for digital assets and aim to offer regulated, integrated services. Their entry provides investors with institutional-grade security and legitimacy.
What are the main benefits of using a licensed brokerage for crypto trading?
Key advantages include official asset verification, reduced regulatory risks, and potential access to combined traditional and crypto investment portfolios.
Do I need overseas documents to trade crypto with traditional brokers?
Yes, most licensed brokers require proof of identity and residency, such as visas or foreign ID cards, to comply with international regulations.
How does tax compliance work when using these services?
While brokers assist with transactional compliance, users remain responsible for reporting taxes in their home jurisdictions. Consult a tax professional for guidance.
Can I still use platforms like Binance if I have a brokerage account?
Absolutely. Many investors use both types of platforms—brokers for legitimacy and crypto-native exchanges for flexibility or specific features.
Will traditional brokers support all cryptocurrencies?
Not necessarily. Licensed platforms often list only major, compliant coins, unlike decentralized exchanges which may offer a wider range.
Conclusion: The Evolution of Crypto Identity
The crypto journey has evolved from informal arrangements to structured validation. Traditional brokers act as a bridge, offering official endorsement without sacrificing the freedom of digital assets. This isn’t about choosing sides but about expanding options—for those navigating both crypto and traditional finance, licensed brokers provide a trusted pathway.
The allure of cryptocurrencies lies not in defying rules but in forging efficient wealth movement within them. "Official certification" is simply the latest chapter in this ongoing story.