Hong Kong SFC Receives 18 Crypto License Applications Amid Rising Crypto Adoption
Summary:
Hong Kong's Securities and Futures Commission (SFC) has recently received 18 applications for crypto licenses from various local and international entities over a span of two months. The license applicants, including Huobi HK, must go through stringent due diligence procedures. Alongside this, Hong Kong has gained attention for its clear stance on licensing, notably from traditional brokerages like Tiger Brokers. The SFC also received its first application for a Bitcoin exchange-traded fund (ETF). With increasing crypto adoption, Hong Kong has imposed a minimum 50% insurance requirement for licensed crypto exchanges handling customer assets.
The Securities and Futures Commission (SFC) of Hong Kong has seen a surge in crypto license applications with 18 submitted in just over two months from a mix of domestic and international contenders. As of February 20, the local branch of cryptocurrency exchange Huobi, known as Huobi HK, has lodged a request for a virtual asset trading platform license from the SFC, as confirmed in a regional report. This makes them one of 18 crypto firms, including DFX Labs, Crypto.com, Bybit, and OKX, that have applied for similar licenses since mid-November 2023.
For their applications to be successful, these candidates must pass thorough compliance procedures, such as an extensive traditional financial review that goes beyond a proof-of-reserves (PoR) check. This leads to Web3 entities sometimes investing up to $25 million in their applications.
Hong Kong's clear stance on exchange licensing has drawn the attention of traditional intermediaries like Chinese stock brokerage, Tiger Brokers. They upgraded their Type 1 SFC license in January to incorporate crypto trading, targeting established investors and financial firms in Hong Kong.
In a conversation with CoinTelegraph, Tiger Brokers' CFO and director, John Fei Zeng said, “Including stocks and options, crypto appears to be an emerging asset class. So, it's a logical step forward for our firm to integrate a new asset class into our broker-dealer business, as our fintech background aligns well with the foundation of Web3.”
In addition to this, the SFC accepted its first-ever application for a Bitcoin (BTC) exchange-traded fund (ETF) spot from Harvest Hong Kong, one of China's leading fund managers, on January 26.
Hong Kong is preparing for a wave of cryptocurrency adoption and has imposed a minimum insurance requirement of 50% for any licensed crypto exchanges managing customer funds. As OSL Exchange revealed earlier, the 50% insurance rule applies to all assets held in custody. Simultaneously, OSL also disclosed a two-year agreement with Canopius, a Lloyds of London underwriting syndicate, for an insurance policy covering 95% of user assets.
Published At
2/21/2024 3:39:33 PM
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