Hong Kong SFC Tightens Crypto with New Licensing Regime: What’s Next?

In a significant change for Hong Kong’s finance, 22 big industry players, including well-known names like Crypto.com and OKX, are seeking a crypto license from the Securities and Futures Commission (SFC) to become virtual asset exchanges in the city.

This comes after Hong Kong’s Legislative Council amended the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) in December 2022, introducing a licensing system for Virtual Asset Service Providers (VASPs).

Crypto Rush

Hong Kong is no longer accepting license applications from cryptocurrency exchanges since February 29 as that was strictly the last day for applying. 

The Securities and Futures Commission (SFC) is standing firm on its directive, instructing non-compliant crypto exchanges to cease operations by May 31, 2024. Investors are urged to switch to licensed platforms for the sake of security.

Crypto exchanges with licenses can only facilitate trades in Bitcoin and Ether initially. The Securities and Exchange Commission (SEC) is currently reviewing other cryptocurrencies and stablecoins for potential approval.

Read More: Hong Kong’s New Crypto Regulations: A Move to Curb Fraud and Enhance Security

The Club Remains Exclusive

OSL Exchange and HashKey Exchange are the first two companies to receive crypto licenses from the SFC, marking significant milestones in Hong Kong’s crypto landscape.

In a cautionary note, the SFC emphasizes that being on the list of 22 applicants doesn’t guarantee approval. Strict compliance with SFC regulations is mandatory for a chance at approval.

On June 1, 2024, the SFC will release a comprehensive list of licensed crypto exchanges, providing clarity on the approved entities.

HTX’s (Huobi) Shocking Exit

Cryptocurrency trading platform HTX, formerly Huobi Global, stunned the crypto community with its withdrawal of its license to operate in Hong Kong. Sources say that the withdrawal was for HBGL Hong Kong Limited, which is under the umbrella of Hong Kong’s HTX. HTX withdrew its application on the 23rd of February, three days after the submission of the application.

Here’s More Information: HTX Withdraws Hong Kong Crypto License Application: What’s Wrong?

As SFC carries out the official procedure of approving licenses, the applicants are highly anticipating their acceptance of the application.

Who do you think will emerge victorious? Share your thoughts.