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SFC’s Chief Executive Julia Leung mentioned that 11 platforms are on the SFC’s “deemed-to-be-licensed” list, and the regulator has completed inspections.
Key Notes
Hong Kong’s SFC to issue 11 crypto exchange licenses in stages by the end of 2024.HKVAX becomes the third licensed crypto exchange, previously, licenses were granted to OSL and HashKey.Despite strict regulations deterring some firms, SFC seeks to balance growth with market stability.Hong Kong’s financial scene is about to shift as the Securities and Futures Commission (SFC) plans to issue more cryptocurrency exchange licenses in stages by the end of 2024. The move marks the third license under the new crypto trading platform rules, highlighting the SFC’s aim to grow the region’s virtual asset industry.
Julia Leung, SFC’s Chief Executive, shared in an interview with HK01 that HKVAX has been approved to run a crypto exchange. Previously, SFC granted licenses to OSL and HashKey, showing the SFC’s active role in building a strong crypto market. Leung mentioned that 11 platforms are on the SFC’s “deemed-to-be-licensed” list, and the regulator has completed inspections, requesting these firms to make changes to meet compliance standards.
Leung added that the SFC expects notable progress by the end of the year and plans to issue more licenses in batches. This phased process helps the SFC keep control while welcoming new applicants. The strategy strikes a balance between encouraging growth and ensuring market stability, which is crucial for maintaining investor trust in the unpredictable crypto space.
SFC’s Licensing Strategy for Crypto Platforms
SFC’s granted license to HKVAX pushed the company’s focus on security token offerings and real-world asset tokenization. The company also offers over-the-counter trading, exchange, and custody services. Co-founder and CEO Anthony Ng remarked that this achievement aligns with Hong Kong’s aim to strengthen its standing as a financial hub and global asset management center. Securing the license, Ng said, confirms HKVAX’s role in helping Hong Kong lead in the virtual asset sector.
Hong Kong’s push to attract crypto firms began in June 2023 with the launch of its crypto licensing regime for trading platforms. This new framework permits licensed exchanges to offer retail trading, seeking to draw both local and international crypto businesses. By implementing this system, Hong Kong aims to boost its status as a leading financial center, capitalizing on growing interest in digital assets.
However, not all reactions have been positive. Lawmaker Duncan Chiu expressed concern about the “overly strict” regulations for exchanges seeking licenses. Chiu noted that these tough rules have discouraged major global exchanges from entering Hong Kong’s market. Several exchanges, such as OKX, Gate.io, and HTX, have pulled their applications, citing regulatory difficulties. This highlights the ongoing challenge of balancing market stability with industry growth.
Industry Response to Hong Kong’s Crypto Regulations
While some major players have withdrawn, firms like Bullish and Crypto.com persist as applicants for licenses on the SFC’s website, showcasing sustained engagement in Hong Kong’s cryptocurrency arena. Their ongoing presence underscores a strong belief in the region’s long-term prospects despite regulatory challenges.
The SFC aims to issue 11 crypto exchange licenses by year’s end, signaling a robust effort to bolster Hong Kong’s stature as a premier financial center in asset management and digital finance. However, the regulator must address concerns from figures such as Duncan Chiu to create a regulatory environment that attracts global talent and investment effectively.
As Hong Kong progresses through this intricate scenario, the effectiveness of its crypto licensing strategy will depend on the SFC’s ability to maintain a balance between strict regulation and fostering a business-friendly atmosphere.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.
