Hong Kong has recently advanced its ambition to establish itself as a global crypto hub by accelerating its licensing process for virtual asset trading platforms (VATPs).
On December 18, the region’s Securities and Futures Commission (SFC) announced the approval of four additional licenses for crypto exchanges—HKbitEX, Accumulus, DFX Labs, and EX.IO.
This move is part of Hong Kong’s broader effort to create an appealing regulatory framework that will attract crypto firms to the region.
Revamped Licensing Process and Enhanced Oversight
Hong Kong has been in active contact with the crypto industry since implementing its licensing regime for VATPs in June 2023. Retail trading services can now be offered by licensed exchanges, in a move toward legalizing crypto-related actions.
Prior to this, the Hong Kong SFC granted licenses to just 3 exchanges — OSL, HashKey, and HKVAX. However, with the latest approvals, the region seems to be committed to promoting a friendly environment for crypto operations.
Meanwhile, the SFC has adopted a more focused stance on licensing, with an emphasis on regulatory compliance and operational clarity.
Under the new system, applicants will be subject to rigorous evaluations of their platform policies, procedures, systems, and controls. Platform administrations, which require a certified public accountant to sign off on, must meet these high standards before launching.
Eric Yip, the SFC’s Executive Director of Intermediaries, highlighted the proactive role of the regulator in expediting the licensing process. Yip said in an official statement:
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.
The SFC has also implemented a two-phase assessment system. Following initial approvals, exchanges must complete a second-phase evaluation under the SFC’s supervision. Upon satisfactory completion, restrictions on their business scope will be lifted.
Hong Kong Continous Push For A Crypto Hub
Aside from the acceleration of the approval of exchange licenses, Hong Kong has also recently made some notable developments showcasing the region’s seriousness in embracing the crypto industry.
Back in late November, the Financial Services and Treasury Bureau in Hong Kong suggested “waiving capital gains tax” on investments in cryptocurrencies and other alternative assets for hedge funds, private equity funds, and certain family offices.
Before that, Hong Kong also saw Asia’s largest digital asset bank, ZA Bank, launch a retail cryptocurrency trading service in the city. This crypto trading service, according to reports is said to be launched in collaboration with HashKey Exchange, one of the licensed exchanges in Hong Kong.
Featured image created with DALL-E, Chart from TradingView
