Hong Kong to Approve New Batch of Crypto Licenses by Year-End, SFC Confirms

Hong Kong to Approve New Batch of Crypto Licenses by Year-End, SFC Confirms

The Hong Kong Securities and Futures Commission (SFC) is set to approve a new wave of cryptocurrency licenses by the end of the year, with 11 crypto platforms currently under consideration.

In a recent interview with Hong Kong 01, Liang Fengyi, CEO of the China Securities Regulatory Commission, confirmed that the SFC plans to issue licenses to Virtual Asset Trading Platforms (VATPs) in batches.

So far, the SFC has granted licenses to three crypto exchanges: Hong Kong Virtual Asset Exchange, OSL Exchange, and HashKey Exchange. An additional 11 platforms have submitted applications and are undergoing the approval process.

Fengyi revealed that regulators have completed the initial phase of on-site reviews and have requested necessary revisions from applicants. She further stated that the SFC aims to accelerate the regulatory framework for virtual assets by issuing more licenses before the year’s end.

“Those who fail to meet the regulatory requirements will be disqualified, while those who comply will receive conditional approval,” she noted.

Looking ahead to their 2024-2026 strategy, Fengyi emphasized that Hong Kong regulators will continue to develop comprehensive regulations for virtual asset trading platforms. This includes supporting the tokenization of traditional assets and promoting the use of regional blockchains and Web3 technologies.

“We expect the entire framework to be fully in place by next year,” Fengyi added.

Regarding cryptocurrency over-the-counter (OTC) services, she highlighted that a new licensing system for OTC custody services has been introduced, allowing industry participants to provide feedback. In mid-September 2024, the SFC partnered with the Customs and Excise Department to begin issuing licenses for OTC crypto trading services. This followed challenges faced by platforms in meeting regulatory standards for asset management and cybersecurity protocols.

On September 30, ZA Bank became the first virtual asset bank in Hong Kong to receive an SFC license after a year-long review process.

As Hong Kong’s regulatory environment becomes increasingly stringent, obtaining licenses has become essential for crypto platforms, marking a significant step toward creating a regulated and secure cryptocurrency ecosystem.