Hong Kong SFC gives licenses to four new crypto exchanges
In the face of increasing competition to establish itself as a crypto hub, Hong Kong's securities regulator has licensed four additional cryptocurrency exchanges in the city.
According to LVRG Research director Nick Ruck, the approvals demonstrate the city's continued dedication to digital assets.
Hong Kong increases VATPs to seven with four new approvals
The Hong Kong Securities and Futures Commission (SFC) said that, following the applicants' responses to the regulator's on-site inspections, it authorized licenses for four more exchanges on Wednesday under its "swift licensing process": Hong Kong Digital Asset EX, Thousand Whales Technology (BVI), DFX Labs company, and Accumulus GBA Technology Co. Three such licenses have previously been granted by the SFC to OSL, HashKey, and HKVAX. With this, the city now has seven licensed virtual asset trading platforms.
The four new licensees were part of the nearly thirty companies that applied for the license this year; however, due to strict regulatory requirements, several major platforms, such as OKX and HTX, withdrew their applications earlier this year, leaving only roughly a dozen applicants.
Hong Kong plans to become a crypto hub
An official crypto licensing regime for "virtual asset trading platforms" (VATPs) was introduced in June 2023, enabling authorized exchanges to provide retail trading services. Commercial activity involving crypto assets has been strictly prohibited in mainland China, but Hong Kong has attempted to establish itself as a hub for access to digital assets like Bitcoin.
Hong Kong SFC accelerates crypto licensing process
As Hong Kong continues its push to become a cryptocurrency hub, the city has promised to expedite the licensing process for cryptocurrency trading platforms. The SFC stated that it has made efforts to speed up the licensing procedure. The SFC's Executive Director of Intermediaries, Eric Yip, said in a statement on Wednesday that "we have been proactively engaging with VATPs' senior management and ultimate controllers, which helps drive home our expected regulatory standards and expedite our licensing process for VATPs."
The SFC gave further information about a revised licensing procedure in a different circular that was made public on Wednesday. The regulator mandates that applicants submit to assessments of their platform policies, procedures, systems, and controls in addition to on-site inspections. These must be approved by a certified public accountant. The SFC also intends to establish a "consultative panel" for licensed cryptocurrency trading platforms, which is anticipated to start early next year, according to remarks made last week by Joseph Chan, Acting Secretary for Financial Services and the Treasury.
In addition to cryptocurrency trading, the Hong Kong government has published consultation documents for stablecoin issuers that reference fiat currency, indicating that it is ready to regulate stablecoins.
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