Hong Kong Reveals Names of Crypto Exchanges Set for Licensing

The Hong Kong Securities and Futures Commission (SFC) revealed on June 1st a compilation of cryptocurrency trading platforms poised to secure licenses imminently.

The SFC’s official site lists an ensemble of 11 candidate platforms, such as Matrixport HK, Accumulus, Crypto.com, and Bullish, categorized as “deemed to be licensed.” The roll includes other entities like HKbitEX, PantherTrade, DFX Labs, Bixincom, xWhale, YAX, and WhaleFin.

Rigorous Regulations in Hong Kong Deter Leading Exchanges

These companies, once licensed, would elevate the tally of licensed exchanges in Hong Kong to a total of 13. Presently, OSL Exchange and HashKey are the only two with licenses in place, having been authorized prior to the enactment of the new rules in June 2023.

The SFC has also made it clear that the exchanges marked as “deemed to be licensed” have not received official licensing as of yet. Furthermore, it has recommended that investors approach these platforms with caution, as the possibility remains that they may not achieve licensure and might be required to suspend operations in Hong Kong.

Though Hong Kong has aspired to morph into a pivot for digital assets over the previous year, its rigid guidelines—aimed to shield investors, obstruct money laundering and terrorism funding—have posed major hindrances to numerous exchanges. It’s reported that the SFC has ordered its exchange license aspirants to avert service to mainland Chinese clients, despite China’s prohibition of cryptocurrencies.

Due to such rigid regulations, prominent exchange platforms including OKX, Gate.io, KuCoin, Binance, and HTX (formerly Huobi) have chosen to retract their virtual asset trading platform (VATP) license applications in Hong Kong.

Find out more: Top 11 Crypto Exchanges and Apps Ideal for Newcomers in 2024

The issue surrounding the retreating platforms has cast a spotlight on the SFC’s application protocol. Hong Kong’s official David Chiu voiced concerns about the city’s capacity to foster financial innovation amidst such significant constraints at inception.

“Concern is brewing among industry professionals that the new license arrangement could evolve into a fiasco akin to the ‘food truck incident’ or mimic the non-eventful promotion of virtual banks. There is apprehension that repeating those past errors and if licenses are ultimately granted, carving out a viable business model will prove challenging,” Chiu is cited to have expressed.

Read additionally: Understanding Crypto Regulation: Pros and Cons

Furthermore, Chiu suggested that the nascent licensing framework jeopardizes market trust. He noted that various stipulations for approval are borrowed from traditional finance realms, which can seem excessively stringent for the emerging Web3 sector. How the industry confronts these hurdles will play a pivotal role in dictating the trajectory of cryptocurrency exchanges in the area.