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The Securities Futures Commission in Hong Kong plans to license 11 virtual asset trading platforms by the end of 2024 as part of its renewed regulatory efforts to manage the growing cryptocurrency market.
Hong Kong to License More Crypto Exchanges by End of 2024
The Securities Futures Commission, Hong Kong's financial watchdog, has stated its intention to provide additional licenses to digital asset companies and cryptocurrency exchanges in the region by the year's end.
SFC Targets 11 Crypto Platforms for Licensing
Local media source HK01 reported on October 6 that SFC CEO Julia Leung expects the agency to "make progress" in licensing 11 Virtual Asset Trading Platforms (VATPs) that are currently functioning and on the regulator's list of possible licensees.
In an effort to make it easier for crypto exchanges to become compliant, she also mentioned that licenses would be provided in "batches" going forward, Cointelegraph shares.
Uncertainty Around Additional VATP Applications
The VATP application status of sixteen different organizations is still unknown. Though the SFC advises against doing business with them, Eleven is already acting as if they have a license.
The first round of "on-site" evaluations for the crypto businesses has been finished, according to Leung, and all VATPs that follow its licensing model may anticipate having their applications granted.
Non-Compliance Could Lead to Revoked Licenses
Companies who fail to fulfill the standards set by the SFC would likely have their licensing qualifications revoked, according to Leung.
Commenting on the SFC's plans to advance crypto platform laws, encourage Real World Asset (RWA) tokenization, and more extensively examine blockchain technologies, Leung said this on October 6, the same day the organization unveiled its vision for 2024–2026.
Hong Kong's Slow Crypto Regulations Under Scrutiny
Despite its stated goal of becoming a global hub for crypto and financial technology, Hong Kong has been criticized for its glacial pace of crypto regulation and the fact that retail crypto investors in the city can only purchase four cryptocurrencies at the moment.
And yet, according to Leung, we should have a finalized regulatory framework for crypto assets by year's end.
Recent Crypto Licensing Milestones in Hong Kong
Just three days ago, crypto exchange HKVAX was accepted as the third to get a trading license in Hong Kong. OSL and HashKey received their licenses in 2020 and 2023, respectively. This update on crypto licensing follows those developments.
JPEX Scandal Prompts Regulatory Overhaul
In 2023, a crypto exchange based in Dubai called JPEX was embroiled in a $165 million controversy, prompting Hong Kong to prioritize the licensing and regulation of crypto businesses.
The exchange advertised its services extensively in Hong Kong before increasing withdrawal costs in September and blocking users from accessing their money, according to over 2,500 Hong Kong residents who say the exchange deceived them.
SFC Cracks Down on Unregistered Crypto Businesses
Hong Kong has pledged to tighten its crypto legislation and crack down on unregistered businesses following the debacle. As an added measure, the SFC and the police formed a task force to address illegal cryptocurrency exchanges and revised their regulations regarding the sale and requirements of cryptocurrencies.
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