The Hong Kong Securities and Futures Commission (SFC) is making strides in the cryptocurrency industry by planning to issue more licenses to crypto businesses by the end of the year. This development comes on the heels of HKVAX becoming the third licensed crypto exchange in the city, as reported by local news outlet Hong Kong 01.
SFC CEO Julia Leung revealed that the agency will be granting licenses in batches to allow more crypto firms to enter the market gradually. Currently, there are 11 Virtual Asset Trading Platforms (VATPs) on the regulator’s list of potential licensees. The SFC has completed the first round of inspections and has advised these firms to make necessary adjustments to meet regulatory standards.
Leung emphasized the importance of strengthening the regulatory framework for virtual assets, stating that companies failing to meet the required standards will be disqualified from the licensing process. She mentioned, “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.”
Looking ahead, Leung outlined the SFC’s regulatory plans for 2024-2026, which include advancing regulations for virtual asset platforms, promoting the tokenization of traditional assets, and exploring regional blockchains and Web3 technologies. She expects the regulatory framework to be finalized by next year.
In addition to licensing virtual asset platforms, the SFC has introduced a new licensing system for over-the-counter (OTC) crypto services. Leung disclosed that the initiative is seeking feedback from industry participants to refine the approach.
These regulatory efforts are part of Hong Kong’s broader strategy to establish itself as a leading digital asset hub. While the region’s clear regulations aim to attract businesses, the stringent rules focused on investor protection and preventing money laundering have posed challenges for some global platforms, such as Binance.
Overall, the SFC’s proactive approach to regulating the cryptocurrency industry signals a commitment to fostering a safe and thriving environment for crypto businesses in Hong Kong.