- HKVAX has secured its license, making it the third crypto platform approved by the SFC in Hong Kong.
- The SFC aims to issue more licenses by year-end to bolster the crypto ecosystem.
- HKVAX will provide over-the-counter trading and custody solutions, solidifying its position in the virtual asset sector.
HKVAX has secured its license to operate a cryptocurrency exchange, marking a significant step in Hong Kong’s evolving financial landscape. The Securities and Futures Commission (SFC) recently confirmed this approval, making HKVAX the third crypto platform licensed in the region.
Simi Cheung, head of the SFC’s Inspection & Money Laundering Branch, announced the decision in an interview. She mentioned that the new licensing framework will attract more crypto firms to Hong Kong. Additionally, the SFC plans to issue more licenses by the end of the year.
This follows the earlier licensing of OSL and HashKey alongside HKVAX. These companies have already begun offering crypto trading services in the city. Hong Kong’s initiatives to strengthen its position in the global crypto market align with the SFC’s strategic goals.
Per SFC CEO Julia Leung, more cryptocurrency exchanges are expected to receive approval to operate in Hong Kong by year-end.
What Does HKVAX Cofounder say?
According to COO and Cofounder Sam Fok, securing the license is just the beginning. He mentioned that HKVAX will continue to execute its business strategies.
He emphasized that its structure offers a robust platform for potential clients and partners. HKVAX is not merely an exchange but a comprehensive ecosystem.
Co-Founder and COO Sam Fok stated: “Obtaining the licence is just the first step. We will continue implementing our business plans.
Fok added that the licenses reflect the company’s commitment to compliance and security. He stressed HKVAX‘s adherence to the highest standards. This includes KYC and AML, creating a secure trading environment for investors.
The company also offers comprehensive insurance for its custody services, ensuring the absolute security of client assets.
HKVAX’s core services include efficient OTC brokerage, a 24/7 trading platform, and comprehensive asset custody.
Additionally, HKVAX provides professional investors with one-stop virtual asset management services. It includes security token offerings (STOs) and real-world assets (RWAs).
These services include asset tokenization consulting, technical support, token issuance and listing, secondary market trading, asset custody, and management.
Mixed Reactions Drawn From Recent Actions of Hong Kong’s Crypto Regulation
Under the licensing framework introduced in June 2023, the SFC allows crypto trading platforms to engage with retail investors.
This sparked interest from crypto firms looking to establish a presence in Hong Kong. Leung emphasized the balance between regulation and fostering innovation in the sector.
HKVAX aims to build an intelligent, secure, seamless, and compliant virtual asset ecosystem. Dr. Anthony Ng, Co-Founder and CEO of HKVAX, said: “Obtaining the licence affirms HKVAX and demonstrates Hong Kong’s resolve to lead in the virtual asset industry. We’re part of a financial landscape revolution, aiming to establish Hong Kong as the STO and RWA center for Asia and beyond.”
Dr. Ng emphasized that STO and RWA development will revolutionize traditional financial markets, enhance asset liquidity, and create more opportunities for financiers and investors. This aligns with Hong Kong’s goals to strengthen its position as a financial hub and international asset management center. He believes HKVAX will offer higher quality, diverse options for local and global financiers and investors.
HKVAX is leveraging this opportunity to provide over-the-counter trading and custody solutions. It specializes in tokenization of security token offerings (STO) and real-world assets (RWA).
This holistic approach offers comprehensive virtual asset financial services, bolstering Hong Kong’s fintech ecosystem.
Dr. Anthony Ng is the cofounder and CEO of HKVAX. He stated that the license reaffirms the company’s dedication to the virtual asset industry. He further highlighted Hong Kong’s ambition to remain a global financial hub.
However, some stakeholders have voiced concerns about the regulatory environment. Local lawmaker Duncan Chiu noted that stringent crypto regulations might deter international exchanges from entering the Hong Kong crypto market.
Hong Kong Crypto Platforms Are Facing Governance Concerns
The SFC is evaluating 11 additional platforms that have applied for licenses under the new regulatory framework. These platforms are undergoing initial inspections, and the SFC has identified some compliance issues among the applicants.
Several exchanges have been found to have governance issues. Few rely too heavily on a small group of executives to custody client assets. For SFC standards, it has bugged them, raising concerns about asset management practices.
Additionally, inspections revealed cybersecurity weaknesses at some exchanges. The SFC has warned that firms failing to address these issues risk losing their provisional licenses. This ongoing scrutiny underscores the SFC‘s commitment to maintaining high standards in the crypto industry.
Despite the promise of future approvals, there has been criticism that Hong Kong’s regulatory regime is too stringent. This can potentially hinder its goal of becoming a crypto and Web3 hub.
Notably, big names like Coinbase have not secured applications, even after being personally invited by Legislative Council member Johnny Ng.
Other international companies, including OKX and Bybit, have also withdrawn their applications. Both canceled their applications in May without disclosing reasons.
Despite these challenges, Bullish and Crypto.com remain on the SFC’s pending applicant list. With ongoing inspections, the regulator may soon grant additional licenses.
Moreover, Hong Kong is anticipated to see more firms applying under this regulatory framework. The approval of HKVAX is likely to encourage other companies to seek similar licenses.
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.