Key Takeaways
- Hong Kong’s SFC has announced that it will fast-track the applications of Virtual Asset Trading Platforms.
- The SFC is currently processing applications from 14 different crypto exchanges.
- Hong Kong also plans to establish an official consultative panel for licensed platforms in early 2025.
Hong Kong’s securities regulator is set to start fast-tracking licenses for crypto exchanges by the end of 2024 as the region looks to capitalize on the boom in digital asset trading.
The move is part of the region’s push for global dominance in cryptocurrency, blockchain, and fintech innovation.
Hong Kong Pushes for More Crypto Exchanges
Speaking at Hong Kong Fintech Week on Monday, Oct. 28, Eric Yip, Executive Director at the Securities and Futures Commission (SFC), said the market was “already trading in sizeable volumes” and was “too big to ignore.”
The SFC is currently processing applications from 14 crypto exchanges, including major players such as Crypto.com and Matrixport.
At the time of writing, Hong Kong only had three crypto exchanges.
Eleven of the 14 Virtual Asset Trading Platforms (VATPs) being processed already fall under the “deemed to be licensed” category.
This means that the exchanges have been identified as meeting the licensing requirements but are not yet formally licensed by the SFC.
Three-Pronged Approach
For the so-called “deemed” applicants, Yip explained that the SFC had been conducting a fast-tracked version of the application process.
“Instead of going through a document-based vetting process, we have conducted risk-based on-site inspections on all 11 applicants to assess critical areas such as the keeping of client virtual assets, cybersecurity, and their processes for anti-money laundering and know your customer,” Yip said at the annual conference.
A three-pronged approach is being utilized for the application process:
- The SFC first gives the crypto exchanges time to implement the on-site inspection feedback.
- The regulator then grants licenses and provides a restrictive scope for VATPs to work within.
- Finally, the SFC offers an external third-party review, and if it passes, it will lift the restriction.
Over the last five months, the SFC has reportedly conducted all of its necessary on-site inspections and provided feedback to the applicants.
“The applicants and their controllers have, by and large, taken up our feedback, and they are willing to commit resources to rectify issues and take a long-term view in developing their business in a regulated environment,” Yip said.
Panel For VATPs
On top of a fast-track of applications, Hong Kong plans to establish an “official consultative panel in early 2025 for all licensed platforms.”
Yip said every exchange, which will be represented by members of its senior management, will have the chance to have its “voices heard and considered.”
The consultative panel aims to foster transparency and a sense of community between the exchanges.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
