December 19, 2024
Hong Kong’s Securities and Futures Commission (SFC) has approved licenses for four new crypto exchanges: HKbitEX, Accumulus, DFX Labs, and EX.IO.
These approvals bring the total number of exchanges licensed under Hong Kong’s regulatory framework to seven, joining previously authorized platforms OSL, HashKey, and HKVAX.
Robust and transparent licensing framework
The Securities and Futures Commission launched the Virtual Asset Trading Platforms (VATPs) Licensing Regime in June 2023 to provide a safe and regulated environment for individual crypto investors.
Hong Kong’s VATP licensing framework also requires applicants to meet stringent compliance standards, including risk management protocols, operational transparency, and user protection measures. The SFC has expedited the licensing process by engaging directly with the senior management and ultimate controllers of applicant platforms.
“Our proactive communication ensures that platforms fully understand and adhere to our regulatory standards, enabling a faster and more efficient approval process,” said Eric Yip, executive director of brokers at the SFC.
The updated process, outlined on the SFC’s official website, requires two main stages of evaluation. First, exchanges undergo a comprehensive assessment of their internal systems and controls, verified by certified public accountants. The SFC then oversees a second assessment, where restrictions on activities are lifted after platforms demonstrate full compliance with the regulation.
As of December, the SFC’s list of virtual asset trading platforms includes a mix of licensed operators, platforms deemed compliant, and those in the process of being liquidated. This ultimately ensures transparency so investors can verify the regulatory status of any platform operating in Hong Kong.
The Securities and Futures Commission plans to launch an advisory committee for licensed virtual asset trading platforms in early 2025. The Minister of Financial Services said the committee will serve as a platform for dialogue between regulators and industry participants. The initiative aims to foster collaboration, address market challenges, and ensure that the regulatory framework evolves alongside technological innovation.
Hong Kong's position in the global cryptocurrency ecosystem
The move complements the SFC’s broader efforts to establish Hong Kong as a leader in digital asset trading in general. By balancing strict oversight with industry-friendly measures, the region aims to attract top-tier crypto exchanges and institutional investors.
Hong Kong’s licensing regime has made it a standout region in the competitive race to become a leading crypto hub. The region is trying to differentiate itself from other markets, such as Singapore and the UAE.
The SFC demonstrates its focus on transparency through its regularly updated lists: database details of licensed, deemed compliant, and unregulated platforms, available on its official website.
Hong Kong reinforces its commitment to fostering a safe and reliable digital asset ecosystem going forward with its latest approval. As global competition intensifies, these measures highlight the region’s ambition to stay at the forefront of cryptocurrency trading and regulation.
Ultimately, the success of these initiatives will determine whether Hong Kong can establish itself as a global leader in cryptocurrencies.
