Written by: Frank
On June 1, the transition period for the licensing system for virtual asset trading platforms in Hong Kong officially ended, which made the crypto community "disappointed". Previously, trading platforms that had no hope of obtaining licenses had announced their withdrawal from the Hong Kong market one after another.
Although only two institutions have been officially licensed, the Hong Kong Securities and Futures Commission has also updated the list of 11 platforms that are "deemed to be licensed" and the list of 6 platforms that are still on the application list. As of June 3, PANews found that the Hong Kong Securities and Futures Commission has removed the "deemed to be licensed" list and unified it into a "list of virtual asset trading platform applicants", and issued a reminder that "the Securities and Futures Commission urges investors to only buy and sell virtual assets on virtual asset trading platforms licensed by the Securities and Futures Commission. The Securities and Futures Commission reminds investors that virtual asset trading platform applicants that are deemed to be licensed have not been officially licensed by the Securities and Futures Commission." This move may be to avoid misunderstandings.
Overall, the current applicants and licensed platforms are mostly local financial institutions in Hong Kong and companies with resources from mainland China. Almost all large crypto-native exchanges have withdrawn from the competition for Hong Kong licenses.
2 licensed trading platforms
HashKey Exchange: Wanxiang Exchange
Hash Blockchain Limited is a company belonging to HashKey Group, headquartered in Hong Kong. The investor behind HashKey Group is Wanxiang Blockchain Lab, and Wanxiang Blockchain is part of Wanxiang Group's strategic layout in the blockchain industry. Wanxiang Group founder Lu Guanqiu, Jack Ma and Zong Qinghou are known as the three leading figures of Zhejiang businessmen. On May 31, HashKey Exchange announced that it had obtained the AMLO license from the Hong Kong Securities and Futures Commission (operating a virtual asset trading platform under the Anti-Money Laundering Ordinance), marking that HashKey Group has become a fully licensed virtual asset platform in Hong Kong.
OSL Exchange
OSL Exchange is the first licensed virtual asset exchange in Hong Kong. The company behind it is OSL Group, a Hong Kong-based fintech company that focuses on providing blockchain technology solutions and digital asset services. Its executive team comes from well-known financial giants such as HSBC, Morgan Stanley, and Accenture.
11 platforms are considered as licensed
HKbitEX: Founded by former Hong Kong Stock Exchange executives
Hong Kong Digital Asset EX Limited (HKDAEx) was founded by several former senior executives of the Hong Kong Stock Exchange, including former Managing Director of the Hong Kong Stock Exchange, Gao Han. The group's business scope includes securities and commodity trading, fund and asset management, metaverse and Web 3 technology, transaction registration and clearing, trust and asset custody, fund establishment and management, and wealth management and family office services. HKFAEx Group has completed many cases of converting collectibles into virtual assets and promoted copyright NFT as an investable asset class. The group is also a major shareholder of Nasdaq-listed Oriental Culture Group (OCG.US).
HKbitEX has obtained the Hong Kong Securities Regulatory Commission’s approval-in-principle for the Virtual Asset Trading Platform (VATP) license for Type 1 regulated activities (securities trading) and Type 7 regulated activities (providing automated trading services).
PantherTrade: A platform under Futu
PantherTrade is a subsidiary of Futu Holdings and is headquartered in Hong Kong. The company focuses on the development and operation of virtual asset trading platforms. Panthertrade has recruited team members with expertise in the crypto and investment fields, such as Chen Zhihu, the former investment director of Huobi Asset Management (Hong Kong) Co., Ltd., and initial director Fang Xingzhi, who has a background in JD Securities Co., Ltd.
Accumulus: Tianjin's major taxpayer cloud account
Accumulus was founded on September 2, 2022 by Cloud Account Technology (China) Co., Ltd. (referred to as Cloud Account). Cloud Account is an Internet platform that provides services for workers (freelancers) in new forms of employment. According to official statements, it has provided services to more than 83 million people in 120 countries and regions, with total revenue of RMB 108.4 billion in 2023. In 2021, Cloud Account ranked first among Tianjin private enterprises with a tax payment of RMB 3.366 billion. Cloud Account shares a database with the Tianjin Municipal Public Security Bureau and has established cooperation with the latter in tracking down pyramid schemes, illegal fundraising, gambling, drug crimes, smuggling, and trafficking in women and children. Yang Hui, chairman of Cloud Account, is also a member of the National Committee of the Chinese People's Political Consultative Conference, and many leaders have visited the company in recent years. Since 2021, Cloud Account has accepted annual research projects commissioned by the Supreme People's Court, the Supreme People's Procuratorate, and the National Audit Office six times.
DFX Labs: Executives from BGE and HashKey
DFX Labs Company Limited is a professional virtual asset service provider based in Hong Kong, established on May 2, 2023. Simon Au Yeung, COO of DFX Labs, graduated from Wharton School of Business. Previously, he served as CEO of Blockchain Finance and BGE. The company's CTO David Hui was formerly the technical director of HashKey Group.
Bixin.com: An established crypto company
NewBX Limited is a private limited company registered in Hong Kong on August 2, 2019. The company behind it is Bixin Group. The predecessor of Bixin.com platform was HaoBTC, which was established in 2014 and is one of the oldest cryptocurrency exchanges. Bixin Group's current business involves mining machine research and development and manufacturing, mining operations, custodial wallets, MPC wallets, hardware wallets, trading platforms, public chains, venture capital, etc. Its founder Wu Gang started to get involved in Bitcoin in 2009 and is a hardcore Bitcoin player.
xWhale: Huasheng Securities, a subsidiary of Sina, is the major shareholder
Thousand Whales Technology (BVI) Limited was incorporated in Hong Kong on April 11, 2022. It is a virtual asset exchange invested by Huasheng Capital Group, a subsidiary of Sina. It is jointly invested by Huasheng Capital Group, Longling Capital and Vcredit (HKG: 2003). Longling Capital is an equity investment company founded by the famous angel investor Cai Wensheng.
YAX: Incubated by Tiger Securities
YAX (Hong Kong) Limited was established on March 16, 2023. The company is backed by YAX, a global cryptocurrency trading platform that provides virtual asset trading, custody and other services. YAX is a platform incubated by employees of Tiger Brokers, which is backed by smartphone maker Xiaomi.
Bullish: EOS development company Block.one
Bullish (GI) Limited is a company established by Block.one to operate the Bullish exchange. Block.one is the company that develops and supports the EOSIO open source software. The Bullish exchange is backed by Block.one and its investors and received a funding injection including 200,000 EOS at launch.
Crypto.com: A regulated exchange in Singapore
Foris DAX HK Limited is a cryptocurrency trading company registered in Hong Kong, established on August 22, 2018. The company's backer platform Crypto.com is a cryptocurrency exchange based in Singapore. It currently has more than 100 million users and has obtained Singapore's MAS license.
WhaleFin: Amber, which is invested by Temasek, Sequoia and others
Whalefin Markets Limited is a Hong Kong-based company that focuses on providing trading and management services for cryptocurrencies and digital assets. The company is a digital asset platform operated by Amber Group, which was founded in 2017 and is headquartered in Hong Kong. The company focuses on digital wealth management and cryptocurrency liquidity solutions, providing high-net-worth investors and institutions with a comprehensive range of products and services, including trading, asset management, consulting and research. In February 2022, Amber Group received $200 million in financing led by Temasek, with participation from Sequoia China, Pantera Capital, Coinbase Ventures and Tiger Global Management.
Matrixport HK: Wu Jihan’s platform
Flying Hippo Technologies Limited was registered on May 22, 2019 and is headquartered in Wan Chai, Hong Kong. The company behind it, Matrixport, is a Singaporean blockchain financial services platform founded in 2019 by Jihan Wu. The company manages more than US$10 billion in assets and has a monthly trading volume of more than US$5 billion.
6 platforms are still on the application list
BGE: Major shareholder may be the son of the "King of High Seas Gambling"
Hong Kong BGE Co., Ltd. is a wholly-owned subsidiary of HKE Holdings Limited (HKE Holdings Limited, stock code: 1726), a listed company on the main board of Hong Kong. According to the official website, its main businesses include providing software as a service (SaaS) solutions, brokerage services, automatic trading platforms and insurance custody services, specifically for institutional and professional investors. Its parent company HKE is involved in multiple business areas, especially active in financial technology and digital asset services. In addition to the virtual asset trading platform, the company is also engaged in traditional engineering and construction business.
In recent years, the company has paid special attention to expanding its digital asset and blockchain platform business. Applying for a virtual asset exchange does not seem to have brought much stock price stimulus to the company. As of early June 2024, the share price of HKE Holdings Limited fell by about 5.85% from the beginning of the year. Its executive chairman, Ho Man-lin, is the current executive vice chairman of the Hong Kong Volunteer Association Limited, executive chairman of Hong Kong Telecom Holdings Limited, chairman of Wing Wing International Limited, vice chairman and secretary general of the Youth Inspiration Fund, director of the Tung Wah Group Hospital Group, executive director of the Hong Kong Youth Association, and member of the All-China Youth Federation. HK BGE once hired Thor Chan as CEO, and Thor Chan is the former CEO and co-founder of the defunct crypto exchange AAX; HK BGE's parent company HKE Holdings has a market value of approximately 2.3 billion yuan, and the company's chairman and major shareholder is Lian Haomin. It is speculated that he is the son of Lian Zhuozhao, who is known as the "King of High Seas Gambling", but this has not been confirmed.
HKVAX: Founded by CITIC Futures and HSBC executives
Hong Kong Virtual Asset Exchange Limited was founded in 2019 by local entrepreneurs in Hong Kong. The company plans to introduce new product categories such as security token issuance (STO) to lay out investment opportunities in Web3. HKVAX's business includes providing over-the-counter (OTC) brokerage services, institutional-grade trading platforms, and 100% insurance-covered asset custody services for professional investors. The main service customers are professional investors including venture capital, brokerage firms, high net worth individuals, institutional investors, asset management companies, quantitative funds, private equity and hedge funds.
In addition, the HKVAX official website stated that it has obtained in-principle approval from the Hong Kong Securities and Futures Commission (SFC) to conduct regulated activities of Category 1 (securities trading) and Category 7 (providing automated trading services). Co-founder Wu Weiliang was previously the managing director of CITIC Futures International Department. Co-founder Huo Zhaoliang was previously the head of anti-money laundering compliance for HSBC in Hong Kong and Asia.
VDX: Hong Kong Victory Securities
Victory Fintech Company Limited was established on August 5, 2021. The company behind it is Hong Kong Victory Securities. In 2018, Victory Securities established the VDX team, which specializes in the development of digital currency trading systems. The company's executive directors include Gao Juan, chairman of the Hong Kong Securities Association. It also holds the Securities and Futures Commission's No. 1 (virtual asset trading), No. 4 (virtual asset consulting services) and No. 9 (virtual asset asset management services) licenses. Victory Securities Managing Director, VDX co-founder and chief business officer Zhou Lele said that he hopes that after obtaining the SFC license, the revenue brought by VDX can account for 20% of Victory Securities' revenue within three years.
bitV: Participating in the launch of the HK$1 billion Hong Kong Bitcoin ETF Liquid Fund
HighBlock Limited is a Hong Kong-based company founded on October 27, 2023, with limited public information. In May this year, the company launched a HK$1 billion Hong Kong ETF Liquidity Fund with LD Capital and Antalpha Ventures.
HKX: Web3 Crypto Banking Service Platform
hi5 (Hong Kong) Limited is a private limited company established on October 28, 2019, headquartered in Hong Kong. The company behind it is hi.com, a platform engaged in Web3 crypto banking business. The co-founder is Sean Rach, the former chief marketing officer of Crypto.com. hi.com has more than 120 employees in offices in Asia and Europe. The number of registered users exceeds 3.5 million. The hi.com platform has currently issued the token $HI, with a current market value of approximately US$2.4 million.
Bitcoinworld: A subsidiary of Hong Kong-listed Metaverse
Bitcoin World Technology Limited is a wholly-owned subsidiary of BYTE META (08645.HK) and has obtained licenses No. 1 and 7. BYTE META was formerly known as Mi Chong Metaverse and changed its name in 2024. According to media reports, in August 2023, its subsidiary Mi Chong Internet (Wuhan) Co., Ltd. was frozen by the court for suspected pyramid selling.
Regarding the current licensing situation of the Hong Kong Stock Exchange, Hong Kong Legislative Council member Qiu Dagen commented, "Most of the remaining applicants are small in scale, some lack industry experience, and some are traditional financial institutions trying to get involved in VATP (virtual asset trading platform) business, and have not deeply cultivated the Web3 field. Under strict supervision, many industry insiders are worried that even if operators are approved for licenses, it will be difficult to continue to make profits."
Regarding the market's concerns about many native crypto platforms launching applications for Hong Kong licenses, Weng Xiaoqi, CEO of the licensed Hashkey Exchange, revealed to the media that many of the persons in charge who withdrew from applying for licenses have reported their disappointment to him. Weng Xiaoqi believes that "the root cause behind this situation is that according to market observations and evaluations, the Securities and Futures Commission may not be equipped with enough staff to conduct a comprehensive review of all Native Web3 institutions. Optimistically, after the risk control level is delineated, supervision will enter a new stage. Now, the "steady and prudent period" of "steady and prudent development" has ended in stages and entered the development period." In addition, some trading platforms that have withdrawn their applications stated that they are currently undergoing rectification and plan to resume Hong Kong business after obtaining a license in the future.
