Hong Kong’s Securities Futures Commission (SFC) is aiming to issue more licenses for exchanges and digital asset firms by the end of the year.
SFC CEO Julia Leung shared that 11 Virtual Asset Trading Platforms (VATPs) currently on the regulator’s list are expected to move forward in the licensing process, as reported by HK01 on October 6.
Leung revealed that licenses would be rolled out in “batches” to streamline compliance, ensuring exchanges are quickly brought under regulatory oversight.
Currently, 16 companies await SFC’s decision on their VATP applications. Of these, 11 are operating under a “deemed to be licensed” status, despite the SFC’s warnings against trading with such firms until full approval is granted.
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The SFC has already conducted its first round of on-site inspections for the firms. Leung emphasized that those adhering to the SFC’s licensing framework could expect approval soon, while non-compliant companies risk losing their eligibility.
Her remarks coincided with the SFC’s unveiling of its 2024-2026 roadmap, which focuses on enhancing crypto regulations, promoting Real World Asset (RWA) tokenization, and exploring blockchain technologies.
Although Hong Kong has expressed its ambition to become a global crypto hub, retail investors currently have access to only four cryptocurrencies. Critics have pointed to the slow pace of regulatory development, but Leung is optimistic that a finalized framework for crypto assets will be in place by the end of next year.
Just days before Leung’s update, crypto exchange HKVAX became the third platform licensed to operate in Hong Kong, following OSL and HashKey, which obtained their licenses in 2020 and 2023, respectively.
The SFC’s aggressive push for licensing comes on the heels of the $165 million JPEX scandal in 2023, where over 2,500 Hong Kong residents claimed they were defrauded.
In response, the SFC has ramped up its regulations and formed a task force with local police to crack down on unlicensed activities.
The commission is determined to restore trust and solidify Hong Kong’s position as a financial technology leader by swiftly advancing regulatory frameworks and improving investor protections.
