Hong Kong set to expand crypto licensing by year-end amid push to become digital asset hub Hong Kong set to expand crypto licensing by year-end amid push to become digital asset hub
Hong Kong's regulatory push alings with its effort to cement status as digital asset hub.
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Updated: Oct. 7, 2024 at 7:00 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The Hong Kong Securities and Futures Commission (SFC) is reportedly set to issue more licenses to crypto businesses by the year’s end, local news outlet Hong Kong 01 reported on Oct. 7.
This follows the recent approval of HKVAX as the third licensed crypto exchange in the city.
‘Deemed to be licensed’
SFC CEO Julia Leung stated that the agency plans to grant licenses in batches. This strategy will allow more crypto firms to gradually enter the market.
Leung mentioned that 11 Virtual Asset Trading Platforms (VATPs) are currently on the regulator’s list of potential licensees. The SFC has completed the first round of inspections and advised these firms to make necessary adjustments.
She stressed that the SFC is working to strengthen the regulatory framework for virtual assets. Leung also warned that companies failing to meet the required standards will be disqualified from the licensing process.
Leung said:
“Applicants who do not meet the requirements will lose their qualifications for licensing, while applicants who meet the requirements will be granted a license conditionally.”
Long-term regulatory plans
Leung also outlined the SFC’s roadmap for 2024-2026 and said Hong Kong plans to advance regulations for virtual asset platforms, promote the tokenization of traditional assets, and explore regional blockchains and Web3 technologies. She also expects the regulatory framework to be finalized by next year.
On over-the-counter (OTC) crypto services, Leung revealed that a new licensing system has been introduced for OTC custody services. The initiative is seeking feedback from industry participants to fine-tune the approach.
Analysts noted that these efforts are part of Hong Kong’s broader push to position itself as a digital asset hub. While the region’s clear regulations are designed to attract businesses, the strict rules — aimed at investor protection and preventing money laundering — have created challenges for some global platforms, including Binance.
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Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.