All unlicensed cryptocurrency exchanges have been banned from Hong Kong.
It turns out that Hong Kong cryptocurrency exchange licenses are costing applicants several million dollars, down from $25 million a year ago.
In an interview with the Financial Times, Livio Wang, chief operating officer of HashKey Group, said that cryptocurrency exchange licenses are “not necessarily tens of millions of dollars, but they are certainly tens of millions of Hong Kong dollars [ several million USD].” He explained that “the costs corresponding to the stage of preparing the license review materials are different from those of the operation stage.” In addition, he stated:
“For HashKey, which is already in operation, our investment in the entire exchange sector is indeed in the tens of millions of dollars, but it is not expected to be that much for a platform that is still in the licensing stage.”
Since June 1, Hong Kong regulators have banned all unauthorized cryptocurrency exchanges in the East Asian city, with criminal charges for non-compliance. Currently, there are more than 11 companies with the “deemed authorized” designation. As of last year, there are only two fully authorized exchanges: HashKey and OSL.
Wang revealed during the interview that since its launch, HashKey Exchange now manages $500 million in user assets and has facilitated $440 billion in cumulative trades. “Our number of activated clients this week was 267% higher than last week, and the number of new activated clients tripled,” said the blockchain executive.
In April, HashKey followed Coinbase's lead by establishing a Bermuda-based global exchange for international users. Unlike its Hong Kong-based counterpart, which was the first to obtain a license to operate in the region, HashKey Global will not serve Hong Kong, China, the United States and a number of other regions.
The launch of Hong Kong's exchange licensing regime was stymied last year when, despite existing rules, an unauthorized cryptocurrency exchange, JPEX, managed to scam investors out of $166 million before collapsing in September 2023. Since then, residents have become more skeptical about investing in cryptocurrencies.
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