The Hong Kong Securities and Futures Commission (SFC) plans to approve a batch of new crypto licenses by the end of this year. Currently, 11 crypto platforms are under consideration for these licenses.

Upcoming Crypto Licenses in Hong Kong

In an interview, CEO of the China Securities Regulatory Commission, Liang Fengyi, announced that the SFC will be issuing licenses in batches to Virtual Asset Trading Platforms (VATPs). Recently, three licenses were granted to crypto exchanges operating in the region: Hong Kong Virtual Asset Exchange, OSL Exchange, and HashKey Exchanges.

Aside from these three licensed platforms, 11 other platforms have applied for SFC-issued licenses and are currently awaiting approval. Liang Fengyi explained that regulators have completed the first phase of on-site reviews and have requested necessary corrections from applicants.

“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,” said Fengyi.

Regulatory Developments and Future Strategies

As part of their 2024-2026 strategy, Hong Kong regulators aim to promote the development of regulations for virtual asset trading platforms. This includes supporting the tokenization of traditional products and utilizing regional chains and Web3 basic technologies. According to Fengyi, “The entire framework will be completed at least next year.”

Regarding cryptocurrency over-the-counter (OTC) services, Liang Fengyi noted that the CSRC has introduced a new licensing system for crypto OTC custody services to gather feedback from industry players. In mid-September 2024, the SFC began collaborating with the Customs and Excise Department to issue licenses for OTC crypto trading services. At that time, many crypto platforms in Hong Kong faced challenges in obtaining licenses due to non-compliance with government standards on client asset management and inadequate anticipation of cybersecurity risks.

First Licensed Virtual Assets Bank

On September 30, ZA Bank became the first virtual assets bank in Hong Kong to receive a license from the SFC after a year-long review process. Securing licenses has become crucial for crypto platforms operating in Hong Kong as financial regulators have tightened restrictions on unlicensed exchanges, fostering a regulated crypto ecosystem.

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