The Hong Kong Securities and Futures Commission is set to approve a new batch of crypto licenses by the end of this year. Currently, there are 11 crypto platforms under consideration for these licenses.
In a recent interview with Hong Kong 01, CEO Liang Fengyi of the China Securities Regulatory Commission revealed that the SFC will be granting licenses to Virtual Asset Trading Platforms in phases. Three licenses have already been issued to crypto exchanges in the region, including the Hong Kong Virtual Asset Exchange, OSL Exchange, and HashKey Exchanges. Additionally, 11 other platforms have applied for licenses and are awaiting approval.
Fengyi mentioned that regulators have completed the initial phase of on-site reviews and have requested applicants to make necessary adjustments. The goal is to make significant progress in regulating virtual assets by the end of the year by issuing a batch of licenses for VATPs.
She emphasized that applicants must meet the requirements to be granted a license conditionally, while those who fail to do so will lose their qualifications for licensing. Looking ahead to the 2024-2026 strategy, Hong Kong regulators aim to enhance regulations for virtual asset trading platforms, support the tokenization of traditional products, and utilize regional chains and web3 basic technologies. Fengyi mentioned that the entire framework is expected to be completed by next year.
Regarding cryptocurrency over-the-counter services, Fengyi highlighted that the CSRC has introduced a new licensing system for crypto OTC custody services to gather feedback from industry players. In mid-September 2024, the Securities and Futures Commission of Hong Kong collaborated with the Customs and Excise Department to issue licenses for over-the-counter crypto trading services. This move came after crypto platforms in Hong Kong faced challenges in obtaining licenses due to issues related to client asset management and cybersecurity risks.
On September 30, ZA Bank became the first virtual assets bank in Hong Kong to receive a license from the SFC following a thorough review process that lasted a year. Licenses have become increasingly crucial for crypto platforms in Hong Kong as financial regulators tighten restrictions on unlicensed exchanges and work towards establishing a regulated crypto ecosystem.