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Hong Kong Crypto Exchanges Will Be Boosted in the End of 2024

Key Points:

Hong Kong’s SFC plans to license more crypto exchanges by the end of 2024.
To receive full operational licenses, Hong Kong crypto exchanges must address regulatory issues, undergo third-party reviews, and complete recommended changes.

According to Bloomberg, the local regulator is expected to license more Hong Kong crypto exchanges by the end of 2024 after a rigorous five-month probationary period to give weight to the city’s status as a digital asset hub.

More Hong Kong Crypto Exchanges Will Be Opened by Year-End

The Securities and Futures Commission is expected to publish a list of fully licensed platforms before the end of the year, according to the remarks of the SFC’s executive director for intermediaries, Eric Yip, speaking at the annual Fintech Week event.

“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 stated.

Hong Kong embarked on the journey of turning itself into a center for digital assets in 2022 in an effort to regain its lost international popularity due to political unrest. However, the process of granting licenses to operators of virtual asset exchanges has moved more slowly than expected.

New Regulatory Framework Set for Crypto Trading and Custody for 2025

Currently, three Hong Kong crypto exchanges are fully licensed, while another 11 operate with provisional “deemed-to-be-licensed” status. Several firms were found to be non-compliant after inspections since June and were required to make changes according to the recommendations by SFC.

Licenses for operation within set limitations are issued once they have finished making the required adjustments to the exchanges. This, Yip also mentioned, needs to go through a third-party review coordinated with the SFC before full operation licenses are given out.

The SFC also plans to establish a consultative panel early in 2025 comprising the licensed exchanges for better cooperation and to further advise. The regulator is also working on developing a holistic regulatory framework for crypto-centric over-the-counter trading desks and custodians, thus restating its commitment to digital assets in a regulated environment.

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Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.