Hong Kong Approves 11 Crypto Exchanges Amid Regulatory Changes

Hong Kong's Securities and Futures Commission (SFC) grants initial approval to 11 cryptocurrency exchanges. This marks a significant step towards issuing virtual asset trading platform (VATP) licenses. Hong Kong aims to rival global crypto hubs like Singapore and Dubai.

Crypto.com Pursues Hong Kong License Amid Regulatory Shifts as Major Exchanges Exit

Crypto.com, initially founded in Hong Kong and now in Singapore, is the most notable exchange approved. It's the only one in the top 20 by 24-hour trading volume still seeking a Hong Kong license. Bullish, from Gibraltar, Singapore, and New York, is another key player.

Since last year, exchanges need SFC approval to operate while awaiting full licensing. Exchanges not seeking a license had to cease operations by June 1. Regulatory changes led some exchanges, many with mainland China ties, to withdraw their applications. This includes major platforms like OKX, Binance, HTX, KuCoin, Gate.io, and Bybit.

The Hong Kong government stresses compliance, including measures to block mainland Chinese residents from accessing crypto platforms. This follows the approval of spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) markets.

Regulatory Challenges Impact Hong Kong's Ambition to Become a Crypto Hub

Market confidence is affected by these withdrawals, raising concerns about Hong Kong’s goal to attract crypto businesses and develop a Web3 ecosystem. Legislative Council member Duncan Chiu notes the withdrawals have shaken confidence in local Web3 development. Despite hopes to attract mainland Chinese customers, Beijing maintains a strict ban on commercial crypto activities.

Shenzhen's financial authority warns against cross-border crypto trading, deeming such activities illegal and subject to criminal liabilities. They highlight the risks of crypto fraud and the illegality of providing internet services to mainland customers without approval.

Hong Kong's approval of exchanges is a crucial step in its regulatory journey towards becoming a crypto innovation hub. However, challenges persist, including the withdrawal of exchanges with mainland Chinese connections and Beijing’s stringent ban on digital asset activities.

Hong Kong approves 11 crypto exchanges amid regulatory hurdles, impacting market confidence.