Hong Kong’s financial regulator, the Securities Futures Commission (SFC), is poised to grant additional licenses to cryptocurrency exchanges and digital asset firms operating in the region by the end of 2024. This development comes as part of the city’s broader efforts to position itself as a global hub for digital assets.
According to SFC CEO Julia Leung, the regulator expects to “make progress” in issuing licenses to 11 currently operating Virtual Asset Trading Platforms (VATPs) on its list of potential licensees. This follows the recent approval of HKVAX as the third exchange in Hong Kong to receive a license, joining OSL and HashKey, which were granted licenses in 2020 and 2023, respectively.
Hong Kong’s decision to prioritize licensing and regulation for crypto firms comes after a $165 million scandal involving the now-defunct Dubai-based crypto exchange JPEX in 2023. The incident highlighted the need for stricter oversight of the crypto industry to protect investors.
While the SFC’s move to expand crypto licensing is seen as a positive step for the industry, some critics argue that the regulator’s requirements are too stringent, potentially hindering the city’s ambitions of becoming a major crypto hub. Nonetheless, the SFC’s commitment to licensing more exchanges by year-end signals its intent to create a more regulated and transparent environment for the crypto sector in Hong Kong.
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