Hong Kong to Approve More Crypto Exchange Licenses by Year-End

Hong Kong’s Securities and Futures Commission (SFC) has announced plans to approve more licenses for crypto exchanges by the end of 2024. This follows a five-month review in which only three platforms received full licenses and 11 were given provisional ones, initially raising doubts about additional approvals. However, the new announcement suggests a renewed effort to establish Hong Kong as a digital asset hub in Asia.

During the city’s annual Fintech Week, SFC’s executive director, Eric Yip, confirmed that a finalized list of licensed exchanges is expected by year-end. This aligns with Hong Kong’s goal to promote a crypto-friendly environment amid recent efforts to strengthen its position as a financial center. Yip mentioned that most applicants have responded positively to SFC feedback, focusing on enhancing their operations with improved transparency and better investor protections.

Once exchanges meet SFC standards, they’ll receive licenses with certain restrictions until a third-party review, done in cooperation with the SFC, confirms full compliance. This final licensing phase is designed to ensure these platforms meet high regulatory standards and address any prior weaknesses in their operations.

A consultative panel will also be established in early 2025, including authorized exchanges and the SFC, to foster ongoing dialogue and regulatory collaboration. Additionally, Hong Kong is developing a framework for over-the-counter (OTC) crypto trading platforms and custodians, aiming to create a “safer, more regulated environment” for both institutional and retail investors. Structured regulations, Yip emphasized, are essential for Hong Kong to remain a competitive financial center as more digital asset businesses seek regulatory clarity and security in the region.