Crypto License Granted in Hong Kong Despite Deadline

The Hong Kong Securities and Futures Commission (SFC) has taken a step towards establishing Hong Kong as a global cryptocurrency hub by granting a digital asset exchange license to Hong Kong Digital Asset Xchange (HKDAEx). This move comes despite HKDAEx missing the initial May 31st deadline for application submissions.

HKDAEx, a Hong Kong-based company and member of the Hong Kong Financial Asset Exchange Group, submitted its application on August 27th. The SFC may still review and potentially reject the application if it finds any incomplete information or unresolved fundamental issues.

HKDAEx positions itself as a bridge between traditional and digital assets. They aim to “connect physical assets with digital assets to improve liquidity so as to raise the value of physical assets and to promote the real economy.”

Hong Kong has implemented stricter regulations for cryptocurrency trading platforms. Since June 1st, 2024, operating an unlicensed virtual asset trading platform (VATP) in Hong Kong has been deemed a criminal offense.

While some firms received preliminary approval from the SFC, they haven’t yet secured full licenses. These “deemed-to-be-licensed” applicants operate under a temporary framework designed for existing crypto companies before the new licensing regime was established.

Currently, only two cryptocurrency exchanges hold full operational licenses in Hong Kong: OSL Digital Securities and Hash Blockchain. Several other prominent exchanges, including Crypto.com, Bullish, and HKbitEX, are still awaiting final approval from the SFC.

Hong Kong has taken significant strides to establish itself as a leading center for the cryptocurrency industry. The city aims to attract investors and companies to its digital asset ecosystem.

With advancements in digital infrastructure and tokenization, Hong Kong has the potential to become a free trade hub for innovative financial technologies.

According to the 2024 Henley Crypto Adoption Index published by Henley & Partners, Hong Kong ranks second globally in cryptocurrency adoption, trailing only Singapore. The city received high marks in the study for its economic strength, tax-friendly environment, and efforts to foster public interest in cryptocurrency.

Granting a license to HKDAEx signifies Hong Kong’s commitment to developing a robust and regulated crypto market. With its favorable economic conditions and growing crypto adoption rate, Hong Kong is well-positioned to become a major player in the global cryptocurrency landscape.