Regulation
Hong Kong releases list of licensed cryptocurrency exchanges
On June 1, Hong Kong headlines and Futures The Commission (SFC) has unveiled a list of cryptocurrency trading platforms with licenses pending approval.
According to the SFC website, 11 candidates, including Matrixport HK, Accumulus, Crypto.com and Bullish, are “deemed cleared.” Other platforms on the list are HKbitEX, PantherTrade, DFX Labs, Bixincom, xWhale, YAX, and WhaleFin.
Hong Kong’s strict requirements deter major exchanges
If approved, these companies will carry the number of stock exchanges licensed in Hong Kong at 13. Currently, only OSL Exchange and HashKey hold licenses granted before the new regulations went into effect in June 2023.
However, the SFC clarified that these “deemed authorized” exchanges are not yet formally authorized. Furthermore, he advised investors to be cautious when trading on these platforms, as they may not receive a license and may be forced to cease operations in Hong Kong.
Over the past year, Hong Kong has aimed to do so become a hub of digital resources. However, its strict rules, while designed to protect investors and prevent money laundering and terrorist financing, have created significant barriers for many exchanges. Reports indicate that the SFC instructed exchange license applicants to ensure that they do not make their products available to users in mainland China, even if China has banned cryptocurrencies.
These stringent requirements have led to major exchanges like OKX, Gate.io, KuCoinBinance and HTX (formerly Huobi) a withdraw their applications for a virtual asset trading platform (VATP) licensed in Hong Kong.
To know more: 11 Best Cryptocurrency Exchanges and Apps for Beginners in 2024
List of “deemed authorized” stock exchanges in Hong Kong. Source: Hong Kong SFC
In particular, the withdrawal of these platforms has drawn attention to SFC’s handling of the application process. Hong Kong lawmaker David Chiu has questioned whether the city can truly become a hub for financial innovation, given the numerous restrictions imposed at this early stage.
“Many industry insiders fear that the new licensing system will turn into a repeat of the food truck incident or even become a case of the government promoting virtual banks, with much ado about nothing. They fear that the authorities will repeat the same mistakes and that even if the operators were granted licenses, it would be difficult for them to develop a profit model,” Chiu said. She said.
To know more: Cryptocurrency Regulation: What are the advantages and disadvantages?
Furthermore, Chiu said the new licensing system shakes market confidence. He pointed out that many approval conditions borrow from traditional finance, which is too strict for Web3. The industry’s response to these challenges will be crucial in shaping the future of cryptocurrency exchanges in the region.
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