Hong Kong is now in the legal jurisdiction of China (I think) - the UK returned it to them...
The Chinese government seem very volatile about cryptocurrency markets (sometimes they hate them, then bitmain starts to move and they get worried and bring them back or whatever happened)... I have to sayt my issues with bybit were that it doesn't have the litecoin/bitcoin pair and it's very over advertised to the point where they may find it more profitable to exit scam than people trading (they also don't display the fees they'll charge when you make an order on their site which has started to greatly annoy me).
Bitmex has it's issues, I'm not sure what yours were or if it's just being in the US but sometimes things didn't work properly - you get liquidated too early and whenever you try to put in a trade when it's volatile or even just moving a bit you start to be unable to place orders...
I spotted there was a release of a decentralised leverage trading exchange on this forum but I didn't get chance to take a look at it, it seems that decentralising or adding more servers is the way to go for bitmex so maybe once they've evolved a bit the decentralised exchanges will be better but no one seems to make a DEX mobile app.
1. HK is its own jurisdiction and bybit does not base in HK either. Bybit primarily base in Shanghai, China, according to my linkedin research.
2. This convenient Chinese government volitable about crypto excuse is completely out of touch with reality whatsoever. These days the Chinese authority sees cryptocurrencies in a positive light.
Many things in China started as a grey area, but once it brings benefits, be it social stability or employment rate, the authority will happily accept it, and even support it. Crypto, as my Chinese friend believes, is getting to this 2nd stage. Dont you know that the Peoples Bank of China has a Digital Currency Research Lab and is about to introduce the first central-bank-backed cryptocurrency?
Even during that 2017 crackdown, many legitimate crypto teams just moved their business registration to somewhere offshore, while the majority of their Chinese operation remained intact. Huobi is still there. OKex is still there. Kucoin is still there. The crypto industry is still there and vividly alive.
3. So why would small-time bybit worry about getting arrested and therefore choose to misrepresent themselves?
It probably has nothing to do with any local regulation, and has everything to do with their real plan.
My Chinese friend confirmed bybit has almost zero Chinese customer base, which I also confirmed on Similarweb. Now I feel it all adds up - they are afraid of being prosecuted like some of their exit scam precursors e.g. PlusToken, EtherDelta and HeroChain, if they have many local Chinese victims. So they made the deliberate decision to scam people from other countries that the Chinese authority can not care less lol.
Source:
https://www.coindesk.com/cryptocurrency-in-china-over-the-counter-under-the-tablehttps://www.coindesk.com/is-chinas-digital-fiat-a-cryptocurrency-heres-what-we-know