Aiming to accelerate the licensing process for digital asset companies operating in the region, SFC continues its work to bring virtual asset trading platforms (VATP) into compliance with the regulations.

According to local media outlet HK01 on October 6, SFC CEO Julia Leung stated that the 11 VATPs currently on the list of potential licensees expect to make progress in the licensing process.

Leung explained that the licenses will be issued in bulk, which will help crypto exchanges comply with regulatory requirements more easily. Although 16 companies’ VATP applications are currently under evaluation, these 11 companies are “considered licensed,” but the SFC advises investors not to transact with these companies.

Leung added that the on-site inspections of these companies have been completed and the applications of those that comply with the SFC’s licensing model will be approved. However, he also emphasized that companies that do not meet the SFC’s regulatory requirements will lose their licensing rights.

These statements came on the day the SFC announced its road map for the 2024-2026 period. The SFC’s new roadmap includes advancing regulation of crypto platforms, promoting the tokenization of real-world assets, and more thoroughly researching blockchain technologies.

In this context, Hong Kong’s retail crypto investors can currently only trade in four cryptocurrencies. The region’s slow progress on crypto regulations has sparked criticism despite Hong Kong’s aim to position itself as a global crypto hub.

Leung stated that the regulatory framework for crypto assets will be completed by 2025.

This development regarding crypto licenses coincided with the news that Hong Kong-based HKVAX crypto exchange received a license. HKVAX became the third crypto exchange licensed in Hong Kong, after OSL, which was licensed in 2020, and HashKey, which was licensed in 2023.

These developments show Hong Kong’s recent steps to tighten regulations for crypto companies and speed up licensing processes.

Hong Kong has begun to strengthen its regulatory action against crypto firms, especially after the $165 million scandal in 2023 involving the Dubai-based JPEX crypto exchange, which is no longer operating.

JPEX was widely promoted in Hong Kong before it abruptly increased withdrawal fees in September, blocking users from accessing their funds. This led to allegations that more than 2,500 Hong Kong residents were defrauded.

Following this scandal, Hong Kong promised to tighten regulations on the crypto market. The SFC has established a task force with Hong Kong police to keep a closer eye on unlicensed firms and prevent illegal activities.

It also updated its policies regarding the sale of crypto assets and licensing requirements. These developments show that Hong Kong is determined to tighten the regulatory environment for crypto firms and make the industry safer.

Hong Kong’s goal is to ensure the protection of investors and regulate the operations of crypto firms as it moves towards becoming a world-class crypto hub. The steps taken in this context reveal the region’s determination to increase confidence in the crypto market.