As part of its licensing policy for crypto platforms, Hong Kong, which wishes to become a major center for cryptocurrencies, has decided to move up a gear. After granting a license to 3 exchanges earlier this year, the Securities and Futures Commission decided to repeat the maneuver, but sparingly.
In Hong Kong, 4 new crypto platforms will be able to offer their products and services
This week, Hong Kong granted licenses to 4 crypto platformsbringing to 7 the number of companies authorized to carry out their activities related to cryptocurrencies in the special administrative region.
In June 2023, Hong Kong decided to open its doors to crypto companiesbut under conditions. So that they can offer their products and services on Hong Kong soil, these companies, also called “ virtual asset trading platforms » (VATP), must obtain approval.
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During the year 2024, the Securities and Futures Commission (SFC)the Hong Kong authority responsible for granting authorizations to eligible crypto platforms to operate in Hong Kong, has received numerous license requests.
After a first inspection, the financial policeman decided to directly grant this license to 3 exchanges: OSL, HashKey and HKVAX. For 11 other crypto platforms, the SFC had made them understand that they were eligible, but than a more in-depth analysis of their file and their activities was required.
Eric Yip, executive director of SFC intermediaries, explained that the regulator had worked collaboratively with crypto platforms to efficiently accelerate the licensing process :
We collaborated proactively with the management and legal managers of the VATPs concerned. In this way, we have enabled these platforms to understand the expected regulatory standards, and in turn, accelerate our licensing process for VATPs.
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The SFC puts in place a very strict process to obtain approval
Thus, 4 new crypto platforms were granted a license this Wednesday: HKbitEX, Accumulus, DFX Labs and EX.IO. At the same time, the SFC published a circular, providing more details on the process of obtaining approval.
For the remaining eligible platforms, in addition to on-site inspections, the regulator requires them to submit to further evaluationsparticularly financial, which a certified public accountant must approve. The financial policeman said that he would be intransigent on this point :
The SFC will oversee the entire Phase 2 evaluation process through tripartite engagement with the VATPs and their external evaluators. At its discretion, the SFC will lift any restrictions once the 2nd phase evaluation is completed.
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In the coming years, Hong Kong sees itself in the El Dorado of cryptocurrencies. However, before acquiring this honorary title, the special administrative region works on the regulations it will put in place to supervise the crypto sector.
In order to make its jurisdiction more attractiveHong Kong would notably be in the process of exempting certain investment funds from taxes on capital gains in cryptocurrencies.
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Source: Press release, SFC Circular
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Investments in cryptocurrencies are risky. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your capacity to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital
Surprised by the rise of crypto-assets at the end of the 2010s, I began to closely follow this sector which fascinates me to the greatest extent. When I'm not in football stadiums, rugby stadiums or handball halls, I work on writing relevant articles around cryptocurrencies and more broadly, Web3.
Zacharie Tazrout
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