Hong Kong’s Securities Futures Commission to License 11 Crypto Platforms by 2024

The Securities Futures Commission in Hong Kong is gearing up to license 11 virtual asset trading platforms by the end of 2024 in a bid to regulate the burgeoning cryptocurrency market. This move comes as part of the regulator’s renewed efforts to manage the growing crypto industry in the region.

The Securities Futures Commission, Hong Kong’s financial watchdog, has announced its plans to grant additional licenses to digital asset companies and cryptocurrency exchanges in the area by the end of the year. According to local media reports, SFC CEO Julia Leung has indicated that the agency aims to make progress in licensing 11 Virtual Asset Trading Platforms (VATPs) that are currently operational and on the regulator’s list of potential licensees.

In an effort to streamline the compliance process for crypto exchanges, Leung mentioned that licenses would be issued in “batches” moving forward. However, there is still uncertainty surrounding the application status of sixteen other organizations, with the SFC advising against engaging with them. Despite this, eleven of these entities are already operating as if they have obtained a license.

The SFC has completed the first round of on-site evaluations for the crypto businesses, and Leung stated that VATPs adhering to its licensing framework can expect their applications to be approved. Companies that fail to meet the SFC’s standards risk having their licenses revoked.

Hong Kong has faced criticism for its slow pace of crypto regulation, despite its aspirations to become a global hub for crypto and financial technology. However, Leung has assured that a finalized regulatory framework for crypto assets will be in place by the end of the year.

Recent milestones in crypto licensing in Hong Kong include the acceptance of crypto exchange HKVAX as the third entity to receive a trading license in the city. This follows the licensing of OSL and HashKey in 2020 and 2023, respectively.

The JPEX scandal in 2023, involving a Dubai-based crypto exchange and a $165 million controversy, prompted Hong Kong to prioritize the licensing and regulation of crypto businesses. In response, the SFC has pledged to tighten its crypto regulations and crack down on unregistered entities, forming a task force with the police to address illegal cryptocurrency exchanges.

Overall, Hong Kong’s efforts to enhance its crypto regulations and oversight signal a significant step towards managing the growing cryptocurrency market in the region.