Hong Kong seeks to approve more crypto exchanges, with 11 platforms currently under review
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The Hong Kong financial regulator, the Securities and Futures Commission (SFC) recently announced that it plans to approve more cryptocurrency exchanges that will become operational in Hong Kong, likely by the end of the year. The announcement came directly from the FSC CEO Julia Leung.
Hong Kong To Assess 11 New Platforms By The End Of The Year
The SFC CEO recently spoke to a local outlet KH01 on October 6, stating that the regulator is looking into 11 platforms that are interested in obtaining a Hong Kong license. The platforms are currently undergoing on-site reviews, but she expects additional progress in their applications before the end of the year.
This development came after the approval of the local crypto exchange HKVAX, which will go live in Q4 2024 according to the current roadmap. However, this will be only the third exchange to be approved by the Hong Kong regulators, which attracted harsh criticism about Hong Kong’s requirements being overly strict.
Apart from HKVAX, the other two platforms that were licensed by the regulator include HashKey and OSL, both of which upgraded their previous licenses. It is also worth noting that one of the companies that applied for a license is CoinDesk’s parent firm, Bullish.
Of course, Hong Kong has a lot more applications from various exchanges apart from the 11 that are under consideration. In fact, the exact number of applicants is not known. The SFC’s website lists 11 or 16 platforms under the new licensing rule.
Hong Kong Faces Criticism From Crypto Communities
As mentioned, the approval process is quite harsh, and Hong Kong has been criticized for the strict requirements, which might delay its goal of becoming a crypto and Web3 hub, as some have argued.
Two months ago, in August of this year, reports said that some exchanges had unsatisfactory practices, like limited executive oversight of client assets, or weak cybercrime defenses, which the regulators found unacceptable. And, while Hong Kong issued invitations to some major players, such as Coinbase, some other firms like Bybit and OKX have decided to withdraw their applications back in May of this year.
Some local outlets have speculated that the reason behind the withdrawal may be the SFC’s requirement that prevents mainland Chinese residents from accessing their services.
Apart from that, the SFC was also criticized for the way it handles rogue exchanges. In 2023, the collapse of JPEX resulted in over 2,600 Hong Kong residents losing over $200 million. This led the regulator to publish lists of suspicious and licensed platforms in order to achieve greater transparency.
