Hong Kong Securities and Futures Commission (SFC). Announce It plans to issue more licenses to crypto asset exchanges by the end of 2024.
The decision comes after a five-month evaluation period, during which only three platforms received full licenses and 11 provisional licences, raising initial concerns about the possibility of further approvals.
Hong Kong promotes a crypto-friendly environment
During the annual FinTech Week event in Hong Kong, Eric Yip, executive director of brokers at the SFC, revealed that the regulator intends to publish a final list of licensed exchanges by the end of the year.
The move signals a pivotal step in the city’s ambition to establish itself as a hub for digital assets in Asia. It is worth noting that Hong Kong is actively renewing its appeal as a financial centre, especially in the wake of recent political challenges.
The city’s ambition to promote a cryptocurrency-friendly environment has been met with interest and caution, as regulatory concerns have slowed the licensing process for new cryptocurrency exchanges.
Yip noted that most applicants have responded to the SEC’s comments by committing to make improvements to their operating practices, including implementing regulatory changes to support investor protection and enhance transparency in the digital assets space. In his words:
Applicants and their monitors have generally been receptive to our feedback and are willing to devote resources to correcting issues and taking a long-term view of developing their business in a regulated environment.
Path to licensing and regulatory developments
Once these exchanges meet the SFC requirements, they will be granted licenses to operate with certain restrictions. These exchanges are expected to undergo a third-party review in cooperation with the SFC before restrictions are lifted, according to Yip.
The final licensing phase aims to ensure that exchanges meet stringent regulatory standards, and address previously identified deficiencies in their operational practices.
An advisory committee will be formed by early 2025, consisting of chartered exchanges and the SFC. This painting will Promote close organizational cooperation and provide A means of continuous dialogue between stock exchanges and regulatory bodies.
In addition to licensing efforts, Hong Kong is developing a regulatory framework targeting over-the-counter (OTC) cryptocurrency trading platforms and custodians. This framework seeks to create a “safer and more regulated environment” for institutional investors and retail users.
Yip highlighted the importance of regulation in maintaining Hong Kong’s position as a competitive financial centre, especially as the region continues to attract a growing number of digital asset companies looking for regulatory clarity and stability.
Featured image created with DALL-E, chart from TradingView