The one-year transition period for virtual asset trading platforms operating in Hong Kong (within which they must complete license applications) officially ended on June 1, 2024. Currently, the only two exchanges that have obtained licenses are OSL Exchange and HashKey Exchange. There are 11 platforms considered as having been granted licenses.
According to a statement released by the Securities and Futures Commission of Hong Kong, after June 1, all virtual asset trading platforms operating in Hong Kong must obtain a license from the commission under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance or be deemed as applicants “considered as having been granted licenses.” Violation of the ordinance will result in criminal liability for the relevant platforms, and the commission will take appropriate enforcement actions.
List of licensed exchanges in Hong Kong
As a result of the JPEX cryptocurrency exchange fraud case, the Securities and Futures Commission of Hong Kong began officially disclosing the status of virtual asset trading platform license applications in late September of last year. The relevant list includes licensed platforms, platforms that have applied for licenses, and closed platforms.
According to the latest announcement by the commission, only OSL Exchange and HashKey Exchange have been officially granted licenses. Both platforms must also conduct due diligence investigations before listing virtual assets for trading to ensure compliance with token inclusion criteria and obtain approval from the commission, as well as disclose sufficient information to investors.
Eleven platforms considered as having been granted licenses
It is worth noting that currently, HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixin.com, xWhale, YAX, Bullish, Crypto.com, WhaleFin, and Matrixport HK are considered as being “considered as having been granted licenses.” In other words, they are on the waiting list.
The commission stated that the above applicants are not necessarily guaranteed to be granted licenses and may need to cease their operations in Hong Kong. They should not currently engage in business activities in Hong Kong or actively promote their services to Hong Kong investors.
On the other hand, platforms that do not meet the requirements and are deemed as “not considered as having been granted licenses” must cease all operations within three months. Previously, exchange platforms such as OKX, Huobi, and Bybit, which had submitted license applications, have withdrawn their applications. Major global platforms like Binance and Coinbase have also not submitted applications.
HashKey CEO: Hong Kong license application costs at least tens of millions
Why have so many platforms chosen to withdraw or not apply? In addition to regulatory requirements, cost may also be a major consideration. According to a report by FT Chinese, Livio Weng, the CEO of HashKey Exchange, which already holds a Hong Kong license, stated that the cost of applying for a Hong Kong license is at least tens of millions of Hong Kong dollars.
Regarding the current regulatory situation, Weng revealed that the Securities and Futures Commission of Hong Kong may not have enough manpower to conduct comprehensive reviews of all native Web3 institutions. However, they have at least provided a clear development roadmap.
Related Reports:
– OKX, Huobi, Gate Withdraw License Applications in Hong Kong “Web3 Capital”
– Hong Kong Expected to Establish VASP Association in June, Decision on Special Legislation by Year-End, Dynamic Zone Verification Turns Out to Be a Mistake
– Securities and Futures Commission of Hong Kong to Open Up STO Securities-type Tokens and RWA, Attracting More Funds into the Virtual Currency Market