On June 1, Hong Kong’s Securities and Futures Fee (SFC) unveiled an inventory of cryptocurrency alternate platforms with licenses nearing approval.
Based on the SFC web site, 11 candidates, together with Matrixport HK, Accumulus, Crypto.com, and Bullish, are “deemed to be licensed.” Different platforms on the record are HKbitEX, PantherTrade, DFX Labs, Bixincom, xWhale, YAX, and WhaleFin.
Hong Kong’s Stringent Requirement Dissuades High Exchanges
If authorized, these corporations will deliver the variety of licensed exchanges in Hong Kong to 13. At present, solely OSL Trade and HashKey maintain licenses granted earlier than the brand new rules took impact in June 2023.
Nevertheless, the SFC clarified that these “deemed to be licensed” exchanges aren’t but formally licensed. Moreover, it suggested buyers to be cautious when buying and selling on these platforms, as they might not obtain a license and might need to stop operations in Hong Kong.
Over the previous yr, Hong Kong has aimed to grow to be a digital asset hub. Nevertheless, its strict guidelines, whereas designed to guard buyers and stop cash laundering and terrorism financing, have created important limitations for a lot of exchanges. Stories point out that the SFC instructed its alternate license candidates to make sure they don’t make their merchandise out there to mainland Chinese language customers, although China has banned crypto.
These stringent necessities have led main exchanges like OKX, Gate.io, KuCoin, Binance, and HTX (previously Huobi) to withdraw their purposes for a digital asset buying and selling platform (VATP) license in Hong Kong.
Learn extra: 11 Finest Crypto Exchanges and Apps for Newbies in 2024
Hong Kong’s Record of “Deemed to be Licensed” Exchanges. Supply: Hong Kong SFC
Notably, these platforms’ withdrawals have drawn scrutiny to SFC’s utility course of dealing with. Hong Kong legislator David Chiu questioned whether or not the town can actually grow to be a hub for monetary innovation given the numerous restrictions imposed at this early stage.
“Many business insiders are apprehensive that the brand new licensing system will flip into a reproduction of the ‘meals truck incident’ and even grow to be a case of the federal government’s promotion of digital banks, with a lot ado about nothing. They’re apprehensive that the authorities will repeat the identical errors and that even when operators are granted licenses, will probably be tough for them to develop a revenue mannequin,” Chiu reportedly mentioned.
Learn extra: Crypto Regulation: What Are the Advantages and Drawbacks?
Moreover, Chiu claimed that the brand new licensing system shakes market confidence. He identified that many approval circumstances borrow from conventional finance, which is just too strict for Web3. The business’s response to those challenges might be essential in shaping the way forward for cryptocurrency exchanges within the area.
