- The SFC plans to approve more cryptocurrency exchanges in Hong Kong by the end of 2024, according to CEO Julia Leung.
- 11 platforms have undergone on-site reviews, following the approval of HKVAX.
- This is part of Hong Kong’s broader push to strengthen its crypto industry and become a hub for Web3.
The commission in charge of Hong Kong’s securities and futures assets (SFC) plans to expand the crypto space in the region. Known as one of the most prominent crypto-friendly areas in the world, Hong Kong regulators are taking steps to add new exchanges, aiming to fortify its status as a global crypto hub and attract significant investments.
Following last week’s approval of the Hong Kong Virtual Asset Exchange (HKVAX) – there are now 11 new exchanges awaiting green lights. This move solidifies and aligns with the region’s overall plan of creating a thriving and regulated crypto ecosystem.
Regulatory Progress
HKVAX’s approval became the third licensed exchange, following HashKey and OSL. Despite being known for its pro-crypto stance, Hong Kong’s regulatory measures are also accused of being overly strict. In many ways, the region appears to be following Europe’s lead, as just last month it adopted the same framework for OTC crypto derivatives regulations as the European Union.
Around a year ago, the SFC faced severe scrutiny after JPEX, an exchange from Hong Kong, was found to be operating without a license, and allegations of fraud involving losses of around HK$1.3 billion ($167 million).
Since then, the SFC began adopting a more transparent approach by publicly disclosing every company that applied for licenses within the region – as well as listing dubious platforms on its official website.
In order to continue ramping up crypto adoption in the region, Chief Executive Officer of the SFC Julia Leung confirmed to local news source HK01 that 11 new exchanges are applying to operate in Hong Kong. According to her, the initial round of on-site inspections is complete, and recommendations for adjustments have been made. The goal is to make progress before the end of the year, including issuing permits in batches.
Hong Kong One of The Fastest-Growing Crypto Hubs
Despite the regulatory hurdles, Hong Kong aims to position itself as a major player in the Web3 and crypto industries. Data from Chainalysis shows that the region has the largest year-over-year growth in Eastern Asia – and is ranked 30th on the Global Crypto Adoption Index.
Unsurprisingly, Hong Kong has experienced the largest year-over-year growth in Eastern Asia at 85.6% and ranks 30th in the world on our Global Crypto Adoption Index. Earlier this year, Hong Kong successfully introduced spot bitcoin ETFs, becoming Asia’s pioneer in offering these financial products. This move has already attracted applications from several mainland Chinese and Hong Kong asset managers.
