Hong Kong licenses 4 more crypto exchanges amid bitcoin price surge
2024-12-18
Hong Kong’s securities regulator has granted approval to four new cryptocurrency exchanges to operate in the city, giving the industry a boost amid a surge in the price of bitcoin this month.
Accumulus GBA Technology (Hong Kong), DFX Labs, Hong Kong Digital Asset EX, and Thousand Whales Technology (BVI) have obtained virtual asset trading platform (VATP) licences as of Thursday, according to an updated list published by the Securities and Futures Commission (SFC).
The approval comes as the city moves to strengthen the virtual asset regulatory regime it initiated two years ago, with the goal of reviving crypto business in the city while protecting retail investors. While mainland China has maintained a strict ban on commercial activity involving cryptoassets, Hong Kong has sought to become a hub for accessing digital assets such as bitcoin, the price of which has gained 60 per cent in the last six months and recently surpassed US$100,000 for the first time.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
“We have been proactively engaging with VATPs’ senior management and ultimate controllers, which helps drive home our expected regulatory standards and expedite our licensing process for VATPs,” said Eric Yip, the SFC’s executive director of intermediaries. “We aim to strike a balance between safeguarding the interests of investors and facilitating continuous development for the virtual asset ecosystem in Hong Kong.”
The newly licensed exchanges can “operate on a restricted scope of business” after they complete the required rectification actions, in addition to “a vulnerability assessment and a penetration test through an independent third party with satisfactory results”, the SFC said.
The regulator has previously licensed three local cryptocurrency platforms: OSL, HashKey and HKVAX. The four new licensees were among the nearly 30 companies pursuing the licence this year, but only about a dozen remain applicants after a number of large platforms, including OKX and HTX, withdrew their applications earlier this year under stringent regulatory requirements.
Thousand Whales Technology, which operates the crypto trading platform EX.IO, is backed by Valuable Capital Group, a brokerage under Sina Corporation, the operator of Weibo, one of China’s largest social media platforms.
The Hong Kong government’s efforts to regulate the volatile crypto sector has been met with mixed reactions from the industry.
While the city’s move in April to allow crypto exchange-traded funds (ETF) was hailed as a major milestone, as it pre-empted the US in launching ETFs that invest directly in ether, the US quickly allowed for similar products, which dwarfed Hong Kong’s in size and scale.
The city also met hurdles in regulating over-the-counter (OTC) virtual asset trading services, which facilitate direct and private large-volume transactions between two parties. After initially proposing to have the Customs and Excise Department oversee such companies, Hong Kong is changing course to have the SFC also participate in regulating the sector after receiving industry feedback.
The Asian financial hub is now moving ahead with a bill that regulates stablecoin issuers, stipulating that firms must be licensed by the Hong Kong Monetary Authority before issuing fiat-referenced stablecoins and other tokens that purport to maintain a stable value with the Hong Kong dollar. The bill has been introduced into the Legislative Council for a first reading on Wednesday.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
Sources: yahoo!
