The Hong Kong Securities and Futures Commission (SFC) is set to approve additional cryptocurrency exchanges by the end of 2024, according to its CEO, Julia Leung.
Per a report by Callan Quinn for CoinDesk, Leung shared the update on October 6, stating that 11 platforms currently undergoing on-site reviews are expected to make further progress on their applications by year’s end.
This announcement comes on the heels of the SFC’s approval of the local exchange HKVAX, which became the third exchange in Hong Kong to receive regulatory approval. HashKey and OSL were previously granted licenses, upgraded from those they held under the prior regulatory framework. Bullish, the parent company of CoinDesk, is also among the companies applying for a license.
Hong Kong’s licensing regime has faced criticism for being too strict, potentially hindering the city’s ambitions of becoming a hub for cryptocurrency and Web3. In August, reports indicated that the SFC found unsatisfactory practices at some exchanges, particularly highlighting concerns over custody practices and cybercrime risk mitigation.
Despite attempts to attract major players, including an invitation extended to Coinbase by a Legislative Council member, several international exchanges have withdrawn their applications, including OKX and Bybit. The South China Morning Post cited the SFC’s directive to prevent mainland Chinese residents from accessing services as a possible reason for these withdrawals.
The SFC has also faced backlash for the collapse of JPEX, a rogue exchange that left 2,600 Hong Kong investors short $200 million. As part of a police investigation into JPEX, over 70 arrests have been made. Following this, the SFC implemented changes to improve transparency around licensed and suspicious exchanges while also seeking input on the regulation of over-the-counter (OTC) trading and custody services.
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