- Hong Kong’s SFC plans on issuing further crypto licenses by the end of the year.
- The SFC seeks to improve regulations while enlisting digital asset businesses.
According to a report on October 7 by local news outlet Hong Kong 01, the Hong Kong Securities and Futures Commission (SFC) is planning to provide further licenses to crypto firms by the end of the year. This announcement comes after HKVAX was recently approved as the city’s third regulated cryptocurrency exchange, marking a significant step ahead in the region’s expanding digital asset environment.
Hong Kong’s Regulation Push
SFC CEO Julia Leung indicated that the agency intends to issue licenses in phases, allowing additional cryptocurrency firms to enter the market gradually. Currently, the regulator’s list of possible licensees includes 11 Virtual Asset Trading Platforms (VATPs). The SFC completed the first round of inspections, providing feedback to businesses on the necessary improvements. These recommendations aim to help them meet regulatory standards effectively.
Leung highlighted that the SFC is working to tighten the regulatory framework for virtual assets, warning that businesses that do not fulfill the necessary requirements will be eliminated from the licensing process. Candidates who meet the conditions will retain their eligibility for licensing. Authorities will issue a conditional license to those who do not comply.
Leung outlined the SFC’s agenda for 2024-2026, which includes aims to improve laws for virtual asset platforms, promote the tokenization of traditional assets, and investigate regional blockchains and Web3 technologies. She plans to finalize the regulatory framework by next year.
Leung discussed the introduction of a new licensing mechanism for over-the-counter (OTC) custodial services in the crypto sector. He encouraged industry participants to provide feedback to help refine this approach. Analysts observe these activities as part of Hong Kong’s more substantial efforts to position itself as a leading digital asset hub.
The region’s clear regulations aim to encourage firms to operate within its jurisdiction. However, strict rules intended to protect investors and prevent money laundering have created challenges for some global platforms. Notably, Binance has faced difficulties navigating these stringent regulatory requirements. As a result, these regulations have created hurdles that can hinder the growth and operations of such companies. As Hong Kong refines its strategy, the crypto sector will keep an eye out for new developments.
