Hong Kong’s Securities and Futures Commission (SFC) is gearing up to approve a batch of new crypto licenses by the end of this year, signaling a significant step towards regulating the virtual asset trading platforms in the region. According to a report by Trisha Husada on October 7, 2024, the SFC is currently considering 11 crypto platforms for licenses, with plans to issue them in batches.
In an interview with Hong Kong 01, Liang Fengyi, the CEO of the China Securities Regulatory Commission, revealed that the SFC has already granted licenses to three crypto exchanges operating in Hong Kong – the Hong Kong Virtual Asset Exchange, OSL Exchange, and HashKey Exchanges. Additionally, 11 other platforms have applied for licenses and are awaiting approval after completing the first phase of on-site reviews and necessary corrections.
Fengyi emphasized that the SFC aims to make significant progress in regulating virtual assets by the end of the year by issuing a batch of licenses for Virtual Asset Trading Platforms (VATPs). She stated that applicants who do not meet the requirements will lose their qualifications for licensing, while those who meet the criteria will be granted a license conditionally.
As part of their 2024-2026 strategy, Hong Kong regulators, led by Liang Fengyi, are focused on promoting the development of regulations for virtual asset trading platforms, supporting the tokenization of traditional products, and utilizing regional chains and web3 basic technologies. Fengyi mentioned that the entire framework is expected to be completed by next year.
In a move to enhance the regulation of cryptocurrency over-the-counter services, the CSRC has introduced a new licensing system for crypto OTC custody services to gather feedback from industry players. This initiative comes after the collaboration between the Securities and Futures Commission and the Customs and Excise Department in issuing licenses for over-the-counter crypto trading services in mid-September 2024.
The importance of licenses for crypto platforms in Hong Kong has been underscored by the tightening restrictions on unlicensed exchanges and the push towards a regulated crypto ecosystem. ZA Bank made history by becoming the first virtual assets bank in Hong Kong to receive a license from the SFC after a rigorous year-long review process, highlighting the significance of regulatory compliance in the evolving crypto landscape.
Overall, the approval of a new batch of crypto licenses by the SFC is a positive development for the crypto industry in Hong Kong, signaling a commitment to fostering a secure and regulated environment for virtual asset trading platforms. As the regulatory landscape continues to evolve, stakeholders in the crypto space will be closely monitoring the progress and implications of these licensing decisions.