In an effort to fortify its regulatory framework for virtual assets, the Hong Kong SFC has granted licenses to four additional cryptocurrency trading platforms, bringing the total to seven.
Thursday marked the publication of the most recent compilation of licensed platforms. Until the Hong Kong SFC’s examinations identify any concerns, these platforms will operate within a restricted business scope. Before restrictions are lifted, they must undertake independent vulnerability assessments and penetration tests that are deemed sufficient by third-party auditors.
The approvals are yet another significant development in Hong Kong’s ongoing endeavor to fortify its regulatory framework for virtual assets, as well as a campaign that was initiated two years ago to enhance the city’s reputation as a crypto capital.
China’s implementation of restrictive regulations regarding commercial activities associated with cryptocurrency is the catalyst for this initiative. In contrast, Hong Kong is establishing itself as a gateway to digital assets, including Bitcoin, which has experienced a 60% increase in the past six months and recently surpassed the $100,000 threshold.
The platforms and their respective external examiners will collaborate with the Hong Kong SFC to conduct a second-phase review. It is permissible for the platforms to expand their operations if all goes well. A recently issued circular provides a comprehensive overview of the licensing process and providing guidance for the subsequent phase.
In the past, the Hong Kong SFC issued licenses to three local platforms: OSL, HashKey, and HKVAX. This year, there were nearly 30 applicants, including the four new licensees. Nevertheless, the stringent regulatory framework resulted in the withdrawal of applications from several major corporations, such as OKX and HTX.
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