Julia Leung, the CEO of the Hong Kong Securities and Futures Commission (SFC), said the SFC plans to approve more cryptocurrency exchanges by the end of the year. This move will allow more exchanges to operate legally in Hong Kong.
The SFC aims to grow the crypto market in Hong Kong, and approving more exchanges could attract new investments and encourage safe trading practices.
SFC Approves New Cryptocurrency Exchanges as Licensing Applications Progress
Julia Leung spoke with HK01, a local news outlet, and shared updates about cryptocurrency platforms applying for licenses.
She mentioned that 11 platforms have already gone through on-site reviews. Leung expects these platforms to progress further by the end of the year.
Her comments came shortly after the approval of HKVAX, a local crypto exchange. HKVAX plans to launch its platform in the fourth quarter of the year. It is the third exchange in Hong Kong to receive regulatory approval, showing the region is moving forward with its crypto regulations.
HashKey and OSL already had licenses, but these were upgraded under the new rules. CoinDesk’s parent company, Bullish, is also among the crypto companies that are applying for licenses.
The SFC has not specified precisely how many platforms have been applied. However, one page on its website shows 11 applicants, while another lists 16.
Strict Rules Causes Major Crypto Firms to Withdraw License Applications
Some believe Hong Kong’s crypto rules are too strict, which could defeat its goal of becoming a center for crypto and Web3.
In August, a report said the SFC found problems with some crypto exchanges. It pointed out that some firms rely too much on a few executives to manage client funds and that other exchanges are not doing enough to protect against cybercrimes.
The report also showed that some big companies, like Coinbase, did not apply for licenses despite getting an invitation from Hong Kong lawmaker Johnny Ng. However, Crypto.com is among the companies found on the list of applicants.
OKX and Bybit are two other companies that withdrew their license application in May. They did not give any explanations for their actions.
The South China Morning Post reported that one reason might be a notice from the SFC mandating that they block mainland Chinese residents from using their services.
After OKX withdrew, lawmaker Duncan Chiu wrote an opinion piece in the Hong Kong Economic Journal. He warned that the approval rules were too strict. According to Chiu, their ideas were based on regulations governing traditional finance, which do not fit well with Web3. Chiu also noted that the remaining applicants were small companies.
Failed Crypto Exchange Spurred Stricter Laws
Lawmakers say the SFC faces backlash and blame when scam exchanges cheat people in Hong Kong. Last year, the SFC faced criticism after the collapse of JPEX, an exchange that scammed over 2,600 people for about $200 million.
More than 70 people supposedly connected to JPEX have been arrested in the police investigation, but no one has been charged yet. In addition, the police raided and shut down several over-the-counter crypto trading shops connected to JPEX.
Due to JPEX’s failure, the SFC changed how it shares information with the public. Now, the SFC publishes lists of companies that have applied for licenses and a list of suspicious platforms. Before this, it refused to share this information.
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Rida Fatima Crypto Journalist 
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