With new rules put in place, Hong Kong SFC has had a list of two companies licensed for trading in cryptocurrencies and seventeen companies that are in the process of applying for licenses. The SFC reiterates that carrying out a business without a license is unlawful and assures the public of legal actions against compliance.
New Regulations for Crypto in Hong Kong
From the 1st of June, the SFC put into force changes to the rules governing virtual asset trading platforms (VATPs). These rules make it mandatory that all VATPs accepting investors from or marketing their services to Hong Kong investors must be licensed by the SFC or be considered as “deemed-to-be-licensed VATP applicants. ” The rationale behind these rules is the protection of investors as well as the promotion of market integrity.
Key Requirements for Platforms
The new regulations require detailed applications from trading platforms which involve management experience, industry qualifications, and external attestations. This also outlines the standards concerning token admission, anti-money laundering, and a ban on proprietary trading. Furthermore, the risks associated with the custody of assets also require adequate insurance or compensation for corresponding platforms.
Licensed Platforms and Pending Applicants
Among them, only OSL Digital Securities Ltd. (OSL Exchange) and Hash Blockchain Ltd. (HashKey Exchange) obtained the license before June 1, 2021. The SFC also listed an additional 17 trading platforms that have applied for registration but have not been approved yet. Some of these applicants are non-licensed and may not undergo regulations by the government. Customers are encouraged to verify the licensing of given platforms so that they can avoid those that are unlicensed or provisionally licensed since they may be closed down if they do not meet the required requirements.
List of Pending Applicants
- Hong Kong BGE Ltd.
- Hong Kong Digital Asset EX Ltd.
- Hong Kong Virtual Asset Exchange Ltd.
- Victory Fintech Company Ltd.
- Panthertrade (Hong Kong) Ltd.
- Accumulus GBA Technology (Hongkong) Co. Ltd.
- DFX Labs Company Ltd.
- Newbx Limited
- Thousand Whales Technology (BVI) Ltd.
- Highblock Ltd.
- YAX (Hong Kong) Ltd.
- Bullish (GI) Ltd.
- Foris DAX HK Ltd.
- Whalefin Markets Ltd.
- Flying Hippo Technologies Ltd.
- hi5 (Hong Kong) Ltd.
- Bitcoin World Technology Ltd.
Impact on Existing Platforms
Several crypto exchanges, including Okx and Gate.hk, have announced that they will cease operations in Hong Kong due to the new regulatory framework.
The SFC’s strict regulations and rigorous licensing process aim to create a safer and more reliable market for investors in Hong Kong. However, the transition is challenging for some existing platforms, leading to significant changes in the local crypto trading landscape.
