The Hong Kong Securities and Futures Commission (SFC) has granted a new digital asset exchange license to Hong Kong Digital Asset Xchange Limited (HKDAEx) despite the May 31 deadline having passed.
HKDAEx, a company based in Hong Kong and a member of the Hong Kong Financial Asset Exchange Group, submitted an application for a digital asset exchange license on Aug. 27, according to the regulator's listing.
However, the Securities and Futures Commission (SFC) may return the application if it is found to be incomplete or if there are unresolved fundamental issues.
HKDAEx said it “connects physical assets with digital assets to improve the liquidity so as to raise the value of physical assets and to promote the real economy.”
List of virtual asset trading platform applicants in Hong Kong. Source: Securities and Futures Commission
Hong Kong’s ongoing crackdown on unlicensed crypto trading platforms
As of June 1, operating an unlicensed virtual asset trading platform (VATP) in Hong Kong became a criminal offense.
Some applicants received initial approvals from the city’s regulator but are yet to be fully licensed. Deemed-to-be-licensed applicants fall under a short-term framework designed for crypto firms operating in the region before the licensing regime was enacted.
As of now, there are only two fully licensed virtual asset trading platforms in Hong Kong – OSL Digital Securities and Hash Blockchain.
Crypto exchanges that have yet to receive full operational licenses in Hong Kong include Crypto.com, Bullish, HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixin.com, EX.IO, YAX, WhaleFin and Matrixport HK.
Hong Kong aims to be a global crypto hub
Hong Kong has been working to establish itself as a global cryptocurrency hub, attracting investors and companies to the city’s digital assets industry. With its advancements in digitalization and tokenization, Hong Kong has the potential to develop into a hub for free trade and serve as a testing ground for emerging financial technologies.
According to the 2024 Henley Crypto Adoption Index, published by the investment migration consultancy Henley & Partners, Hong Kong ranked second globally in cryptocurrency adoption, just behind Singapore.
Hong Kong scored especially high in economic factors and its tax-friendliness. According to the study, the city cultivated an environment that promotes crypto growth “through significant public interest.”
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