Hong Kong has just licensed four more cryptocurrency exchanges. This brings the total number of licensed virtual asset firms to seven. It’s a big move for the city as it aims to revive its crypto industry.
The approvals are part of Hong Kong's effort to strengthen its regulatory framework for virtual assets, which started two years ago. The goal? To boost crypto business while protecting retail investors. Unlike mainland China, which has a strict ban on crypto activities, Hong Kong is trying to become a hub for digital assets. Bitcoin, for instance, has seen a huge price jump—up 60% in the last six months and recently crossing the $100,000 mark for the first time.
Eric Yip, the Executive Director of Intermediaries at the Securities and Futures Commission (SFC), said, “We have been proactively engaging with VATPs’ senior management and ultimate controllers. This helps us communicate our regulatory standards and speed up the licensing process.” He emphasized the importance of balancing investor protection with the ongoing development of the virtual asset ecosystem in Hong Kong.
The newly licensed exchanges will operate on a limited business scope. They need to complete some required actions first, including a vulnerability assessment and a penetration test by an independent third party, with satisfactory results.
Previously, the SFC licensed three local cryptocurrency platforms: OSL, HashKey, and HKVAX. The four new licensees were among nearly 30 companies that sought licenses this year. However, only about a dozen remain as applicants. Some large platforms, like OKX and HTX, withdrew their applications earlier this year due to strict regulatory requirements.