Hong Kong securities regulators are on the verge of officially licensing 11 cryptocurrency exchanges. This comes a year after the country’s Securities and Futures Commission (SFC) issued a proposed regulatory requirement. The expected licensing approval aligns with Hong Kong’s broader plan to be a global hub for digital assets.
Also read: OKX Ends Services in Hong Kong, Withdraws License Bid
Crypto.Com and Bullish are among the 11 exchanges close to being officially licensed and integrated into Hong Kong’s crypto market. The SFC indicated that these exchanges are now “deemed to be licensed” pending the fulfilment of all regulatory requirements.
Hong Kong Wants a Safe Market for Investors
In a bid to safeguard the crypto market within its jurisdiction, Hong Kong vows to carefully scrutinise licensing permit applications, ensuring that only compliant companies are approved. In a May 28 release, the SFC said:
Deemed-to-be-licensed VATP applicants (and their ultimate owners) must fully comply with all of the SFC’s regulatory requirements and licensing conditions. The SFC does not expect these applicants to actively market their services or onboard new retail clients prior to demonstrating the actual implementation and effectiveness of their policies, procedures, systems and controls to the satisfaction of the SFC and being formally licensed.
Securities and Futures Commission (SFC) of Hong Kong
Other exchanges that make up the 11 applicant include PantherTrade, DFX Labs, xWhale, Accumulus, and YAX. According to a Bloomberg report, Bybit and OKX dropped their license applications, while the world’s largest crypto exchange, Binance, did not apply.
US-based Coinbase Global and Kraken also did not apply for permits although the SFC gave a grace period of up to June the first for crypto exchanges to be fully licensed.
“The exchanges will receive their complete permits after the SFC verifies continued compliance with its decree,” the commision said.
Hong Kong To Embrace Bitcoin and Ether ETFs
Hong Kong set out to establish itself as a global digital asset hub during the fourth quarter of 2022. Part of the initiative includes efforts to develop the booming cryptocurrency market.
Increasing the number of authorized exchanges ranks top on the list of the proposed measures, as well as introducing Bitcoin and Ethereum exchange-traded funds (ETFs). Another key measure Hong Kong has implemented include developing a regulatory framework for stablecoins and digital bonds on tokenization platforms.
The ambitious plan to become a global digital asset hub comes amid stiff competition from prominent financial hubs like Singapore and Dubai.
Also read: Hong Kong Targets Fake Crypto Exchange Linked to Elon Musk
Regarding the SFC directive, about two dozen crypto exchanges had submitted their bids for permits by the application deadline, which was the end of February. However, several of these exchanges backed down as the deadline drew near. Hong Kong-based Gate.HK said the company needed “a major overhaul” of its trading platform to meet the stringent requirements.
At press time, only two companies – Hashkey Exchange and OSL Group have attained complete permits to operate as trading platforms for digital assets in Hong Kong.
Cryptopolitan reporting by Enacy Mapakame
