According to Bloomberg, citing people familiar with the matter, after several "deemed licensed" Hong Kong digital asset platforms obtained preliminary approval in June, the Hong Kong Securities and Futures Commission discovered some that did not meet the requirements during on-site inspections of the platforms. Some companies rely too much on a small number of senior personnel to oversee the safekeeping of customer assets, while others fail to properly guard against cybercrime risks.
It's unclear which companies failed to meet the SEC's requirements. People familiar with the matter said inspections are still ongoing and are subject to change. The findings add to the challenges officials face in promoting Hong Kong as a thriving cryptocurrency hub.
There are 11 deemed licensed cryptocurrency exchanges in Hong Kong, including international platforms such as Crypto.com and Bullish, as well as HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixin.com, EX.IO, YAX, WhaleFin and Matrixport HK.
A spokesperson for the Securities and Futures Commission said that the agency does not comment on specific cases and that the review work is to determine whether the applicant complies with its requirements, especially their protection of customer assets and know-your-customer (KYC) processes." The spokesperson added that for those platforms that are unable to correct "material deficiencies discovered during on-site inspections", the SFC may choose to cancel their deemed licensed status or reject their license applications.
Currently, only two cryptocurrency platforms, OSL and HashKey, have been granted full licenses in Hong Kong. During the licensing process, 12 companies have withdrawn their applications, including Huobi HK, OKX, Bybit and VAEX.
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