The cost for applicants seeking cryptocurrency exchange licenses in Hong Kong costs some millions of dollars, but significantly less than the $25 million reported last year. Livio Wang, Chief Operating Officer of HashKey Group, clarified in an interview with Financial Times that the costs differ between the stages of preparing review materials and operational requirements.
Also read: Hong Kong Close To Approving 11 Cryptocurrency Exchanges
Wang noted that acquiring licenses for cryptocurrency exchanges does not have to cost tens of millions of dollars, but it does amount to several million U.S. dollars, which equates to tens of millions in Hong Kong dollars.
“For HashKey, which is already in operation, our investment in the entire exchange sector is indeed tens of millions of dollars, but it is not expected to be so much for a platform that is still in the licensing stage.”
Livio Wang, Chief Operating Officer of HashKey Group
Hong Kong Enforces New Crypto Exchange Licensing Rules
Hong Kong enforced a new licensing regime for crypto exchanges as of June 1, 2024. The Securities and Futures Commission (SFC) now requires all virtual asset trading platforms (VATPs) to be licensed or to have applied for a license. This regulatory change aims to enhance investor protection and market integrity.
Also Read: OKX Ends Services in Hong Kong, Withdraws License Bid
The SFC has emphasized that operating without a license is a criminal offense. Only HashKey and OSL Digital Securities Ltd. (OSL Exchange) are fully licensed. Seventeen other firms, including Hong Kong BGE Ltd., Hong Kong Digital Asset EX Ltd., and Hong Kong Virtual Asset Exchange Ltd., are in the application process. The SFC has urged investors to verify the licensing status of trading platforms to avoid risks associated with unlicensed operations.
HashKey Reports Growth and Expands Internationally
Wang said that since its launch, HashKey has reported managing $500 million in user assets and facilitating $440 billion in cumulative trades. The exchange has seen an increase in customer activity, with a 267% rise in newly activated customers over the past week. HashKey has also expanded its operations internationally by setting up a global exchange in Bermuda, which serves international users but excludes regions like Hong Kong, China, and the United States.
The introduction of the new licensing regime follows the collapse of the unlicensed exchange JPEX, which defrauded investors of $166 million in 2023. This incident increased skepticism among Hong Kong residents towards crypto investments. In response to the new regulations, several exchanges, including OKX and Gate.hk, have withdrawn from the Hong Kong market.
Cryptopolitan by Damilola Lawrence
