Hong Kong to License More Crypto Exchanges by Year-End

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Hong Kong’s drive to establish itself as a global hub for cryptocurrency is gaining momentum. The Hong Kong Securities and Futures Commission (SFC) recently issued its third crypto trading platform license under the city’s new licensing regime. 

This milestone signals not just regulatory progress. But also a broader ambition to position Hong Kong as a leader in the burgeoning world of digital assets.

A New License, A Stronger Position

In a recent interview, Julia Leung, the Chief Executive of the SFC, confirmed that Hong Kong Virtual Exchange (HKVAX) was approved to operate as a crypto exchange. HKVAX is the third company to receive this critical regulatory approval after OSL and Haskey. The firm is set to offer services like security token offerings, real-world asset tokenization, and over-the-counter trading. 

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In a recent statement, Anthony Ng, co-founder and CEO of HKVAX, hailed the license as a sign of Hong Kong’s commitment to fostering a robust virtual asset ecosystem. He expressed that acquiring the license affirms the company. 

Notably, in late August, the SFC granted a digital asset exchange license to Hong Kong Digital Asset Xchange (HKDAEx), a subsidiary of the Hong Kong Financial Asset Exchange Group.

Hong Kong Crypto: More Platforms in the Pipeline

During the interview, Leung highlighted that the licensing wave is continuing with HKVAX. She noted that SFC is actively working through a list of 11 other applicants under its deemed-to-be-licensed category. 

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She disclosed that the regulator has already inspected these platforms and is urging them to make necessary adjustments to meet regulatory standards. She added that the goal is to issue more licenses in batches by the end of the year. 

This progress shows that more platforms are likely to join the ranks of licensed exchanges already in Hong Kong. This development will further solidify the city as a big crypto player in Asia and globally. 

A Challenging Regulatory Landscape

Hong Kong has been thriving to maintain its stature as an international financial hub while embracing the digital asset revolution. However, its stringent regulatory approach has drawn some criticism from the industry. 

Even while its licensing regime promises more secure and reliable operations, Duncan Chiu, a Hong Kong lawmaker, has voiced concerns that the SFC’s rules discourage major global exchanges from entering the market. He noted that platforms like OKX, Gate.io, and HTX have withdrawn their license applications, citing the process’s demanding nature.

Nonetheless, while some have pulled back, others remain committed. Bullish and Crypto.com are among the exchanges still on the SFC’s list of applicants. This signifies that some are still interested in tapping into Hong Kong’s crypto ambitions.

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