Hong Kong’s first retail crypto exchange, Hashkey, has announced the inclusion of Avalanche (AVAX) trading on its platform. However, this development comes with a significant caveat: only professional investors, as defined by the Securities & Futures Commission (SFC) of Hong Kong, will have access to AVAX trading.
This decision is part of the SFC’s efforts to regulate the burgeoning crypto market in the Special Administrative Region (SAR). While Bitcoin, Ether, and Tether (USDT) are approved for retail trading, many other altcoins are subject to professional investor restrictions.
Professional Hashkey investors gain exclusive AVAX access
In a statement released on September 27, Hashkey Hong Kong unveiled its plans to introduce Avalanche (AVAX) trading to its platform. However, unlike the three cryptocurrencies already approved by the SFC for retail trading, AVAX will be accessible exclusively to professional investors. To qualify as a professional investor, individuals must possess an investment portfolio valued at over 8 million Hong Kong dollars, according to the SFC’s criteria.
This move marks a notable distinction between AVAX and other widely traded cryptocurrencies like Bitcoin and Ether, which are available for retail investors in Hong Kong. Tether (USDT) also enjoys retail status, but the majority of altcoins will remain the domain of professional investors on Hashkey.
Hong Kong’s crypto landscape has been evolving rapidly, driven by regulatory changes introduced by the SFC. Since the launch of regulated retail crypto trading in Hong Kong in August, the SFC has imposed stringent requirements on exchanges, including Hashkey. One such requirement is the need for users to deposit a minimum equivalent of $1,500 into their exchange accounts as part of the Know Your Customer (KYC) verification process.
This stricter approach to regulation reflects the SFC’s commitment to ensuring the security and compliance of crypto exchanges operating within the SAR. It’s worth noting that Hashkey Hong Kong’s 24-hour trading volume currently stands at approximately $5.3 million, which is considerably lower than its global counterparts.
Challenges faced by Hong Kong’s crypto exchanges
The road to regulatory compliance in Hong Kong has not been without its challenges for crypto exchanges. Reports indicate that these platforms have collectively invested over $25 million to establish the necessary infrastructure for obtaining a Hong Kong Virtual Asset Provider (VASP) license.
Despite these efforts, the recent collapse of the JPEX crypto exchange during the Token2049 conference in September serves as a stark reminder of the ongoing risks associated with the industry. The incident, described as the largest financial fraud in Hong Kong’s history, saw JPEX accused of embezzling over $178 million of investors’ funds. Importantly, JPEX was operating without SFC registration at the time of the alleged embezzlement.
In response to such incidents, the SFC has taken proactive measures by publishing a warning list of crypto exchanges that are deemed non-compliant within the SAR. These actions underscore the SFC’s commitment to safeguarding the interests of investors and maintaining the integrity of Hong Kong’s emerging crypto market.
