Regulation
Hong Kong discloses list of crypto exchanges requiring licensing
On June 1, Hong Kong’s Securities and Futures contracts Commission (SFC) has revealed a list of cryptocurrency exchange platforms whose licenses are close to being approved.
According to the SFC website, 11 applicants, including Matrixport HK, Accumulus, Crypto.com and Bullish, are “deemed to be licensed.” 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 bring the number of approved stock exchanges in Hong Kong at 13. Currently, only OSL Exchange and HashKey hold licenses granted before the new regulations came into force in June 2023.
However, CFS clarified that these “deemed authorized” exchanges are not yet officially authorized. Additionally, he advises investors to be careful when trading on these platforms, as they may not receive a license and may have to cease trading in Hong Kong.
Over the past year, Hong Kong has worked to become a digital asset platform. However, its strict rules, although designed to protect investors and prevent money laundering and terrorist financing, have created significant obstacles for many exchanges. Reports indicate that the SFC has asked its exchange license applicants to ensure that they do not make their products available to users in mainland China, even if China banned crypto.
These strict requirements have led major exchanges like OKX, Gate.io, KuCoinBinance and HTX (formerly Huobi) for withdraw their applications to a virtual asset trading platform (VATP) license in Hong Kong.
Learn more: 11 Best Crypto Exchanges and Apps for Beginners in 2024
Hong Kong’s list of “deemed to be authorized” stock exchanges. Source: Hong Kong SFC
Notably, takedowns from these platforms have drawn attention to SFC’s handling of the application process. Hong Kong lawmaker David Chiu questioned whether the city could truly become a hub for financial innovation, given the many restrictions imposed at this early stage.
“Many in the industry fear that the new licensing system could turn into a replica of the ‘food truck incident’ or even an example of government promotion of virtual banks, with much ado about nothing. They fear that authorities will repeat the same mistakes and that even if operators obtain licenses, it will be difficult for them to develop a profit model,” Chiu was quoted as saying. said.
Learn more: Crypto regulation: what are the advantages and disadvantages?
Furthermore, Chiu claimed that 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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