Hong Kong’s crypto ambitions are inching forward with 11 exchanges, including Crypto.com and Bullish, deemed “licensed” by the Securities & Futures Commission (SFC). This comes a year after the regulator rolled out a digital-asset rulebook to establish Hong Kong as a crypto hub.
While major players like Binance, Coinbase, and Kraken haven’t applied, this marks a significant step for Hong Kong’s crypto push. Hong Kong has established a June 1 deadline for crypto exchanges to obtain a license or be considered licensed.
According to a Bloomberg report, these “deemed to be licensed” exchanges can now operate in the city but will receive full licenses upon satisfying the SFC’s compliance checks.
Hong Kong’s pivot towards crypto began in late 2022, aiming to revitalize its financial center image after a crackdown on dissent. The city is vying with Dubai and Singapore to become a leading digital-asset center.
About two dozen companies applied for licenses to operate crypto exchanges by the February 29 deadline. Currently, Hong Kong has two fully licensed digital-asset exchanges, HashKey Exchange and OSL Group.
Hong Kong’s approach emphasizes investor protection and anti-money laundering measures, which may deter some with stricter compliance requirements. However, the city offers a potential gateway to mainland China’s wealth, despite a crypto trading ban there.
The crypto industry’s checkered past, including the FTX collapse and Binance’s penalty for money laundering violations, highlights the challenges Hong Kong faces in regulating this evolving space. Additionally, users can utilize virtual private networks (VPNs) or peer-to-peer transactions to bypass regulations.
