The approval comes as the city moves to strengthen the virtual asset regulatory regime it initiated two years ago, with the goal of reviving crypto business in the city while protecting retail investors. While mainland China has maintained a strict ban on commercial activity involving cryptoassets, Hong Kong has sought to become a hub for accessing digital assets such as bitcoin, the price of which has gained 60 per cent in the last six months and recently surpassed US$100,000 for the first time.
“We have been proactively engaging with VATPs’ senior management and ultimate controllers, which helps drive home our expected regulatory standards and expedite our licensing process for VATPs,” said Eric Yip, the SFC’s executive director of intermediaries. “We aim to strike a balance between safeguarding the interests of investors and facilitating continuous development for the virtual asset ecosystem in Hong Kong.”
The newly licensed exchanges can “operate on a restricted scope of business” after they complete the required rectification actions, in addition to “a vulnerability assessment and a penetration test through an independent third party with satisfactory results”, the SFC said.
The regulator has previously licensed three local cryptocurrency platforms: OSL, HashKey and HKVAX. The four new licensees were among the nearly 30 companies pursuing the licence this year, but only about a dozen remain applicants after a number of large platforms, including OKX and HTX, withdrew their applications earlier this year under stringent regulatory requirements.
