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Read more: Hong Kong Crypto Scam Robs 13 Investors Of HK$14.8 Million
SFC CEO Julia Leung announced recently that on-site reviews have been conducted for 11 applicants, while HKVAX became the third exchange to secure regulatory approval last week. The SFC has never explained how many applications it received – press reports variously quote 11 and 16, although SFC officials reject the latter figure.
The call for more Hong Kong crypto exchange licenses comes after criticism that existing rules are too onerous, said to undermine the ambition of the territory to become a leading crypto and Web3 hub.
With more licensed exchanges, the SFC hopes to create an environment that will eventually attract more confidence among investors and International attention to space. The move also comes as part of the city’s longer-term ambition to establish itself as one of Asia’s major centres for digital assets.
Since 2018, Hong Kong has been attempting to market itself as a crypto-friendly jurisdiction. The SFC introduced a regulatory framework for crypto trading that focused on transparency and consumer protection. Further regulations in 2020 required Hong Kong crypto exchanges to register themselves with the SFC, thus moving into more structured trading of virtual assets.
The SFC roadmap up to 2026 also involves refreshing rules for crypto exchanges in Hong Kong, incentivizing RWA tokenization, and further studying blockchain technologies.
The licensing update comes after a $165 million fraud scandal involving the now-defunct Dubai-based crypto exchange JPEX. Over 2,500 HK residents claimed they were defrauded, adding more demand for increased regulatory oversight in the local crypto market.
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