The Hong Kong Securities and Futures Commission (SFC) has moved 11 cryptocurrency exchanges closer to obtaining licenses, a crucial step towards solidifying the city’s position as a digital asset hub.
As of June 1, 2024, the SFC has deemed these exchanges “licensed,” paving the way for them to operate in the city and offer services to local investors. Notable applicants include (link unavailable) and Bullish, both of which have demonstrated significant trading volumes globally.
This milestone comes one year after Hong Kong introduced its digital asset rulebook, aiming to foster a hub for the industry. The city has set its sights on becoming a leading digital asset center, rivaling Dubai and Singapore.
Hong Kong’s strict regulations prioritize investor protection and aim to prevent money laundering and terrorism financing. The SFC has received approximately two dozen license applications, with HashKey Exchange and OSL Group being the only two fully licensed digital asset exchanges currently operating in the city.
The development is notable given Beijing’s ban on digital asset trading, which has led to mainland investors seeking alternative investment opportunities. Hong Kong’s crypto exchanges and ETFs remain inaccessible to mainland investors, despite the city’s efforts to establish a wealth gateway.
The crypto exchange industry has faced scrutiny globally, with notable cases of fraud and regulatory breaches. Hong Kong officials face the challenge of regulating trading activities, which can be masked through virtual private networks or peer-to-peer deals.
