Hong Kong’s Securities and Futures Fee (SFC) just lately granted preliminary approval to 11 cryptocurrency exchanges to proceed working within the metropolis.
This marks step one in direction of issuing licenses for the Digital Asset Buying and selling Platform (VATP) from 2022. The transfer comes as Hong Kong seems to ascertain itself as a distinguished crypto hub alongside international friends resembling Singapore and Dubai.
Hong Kong’s crypto trade scene faces regulatory hurdles
That is reported by the South China Morning Publish the reportamongst accepted exchanges, Crypto.com, initially based in Hong Kong and now working in Singapore, stands out as the most important trade “deemed to be licensed”.
Notably, it’s the solely trade within the high 20 by 24-hour buying and selling quantity as measured by CoinGecko that’s nonetheless searching for a Hong Kong license. Bullish, registered in Gibraltar but additionally working from Singapore and New York, is the subsequent main trade to be thought-about licensed.
Beneath new guidelines Launched final 12 months, cryptocurrency exchanges should obtain approval for the proposed association to proceed working pending full license approval.
The deadline for exchanges that don’t want to get hold of a license to stop operations was June 1. Nevertheless, some exchanges have withdrawn their license functions attributable to issues arising from regulatory modifications.
A number of of the exchanges that withdrew their bids had ties to mainland China, the place they have been initially based however left after Beijing’s repression on digital tokens. Effectively-known exchanges embody native branches of main platforms resembling OKX, Binance, HTX, KuCoin, Gate.io and, most just lately, Bybit.
The Hong Kong authorities has emphasised compliance with rules, together with measures to forestall mainland Chinese language residents from accessing crypto platforms and the newly accepted spot bitcoin (BTC) and Ethereum (ETH) trade traded fund (ETF) markets.
Market confidence shaken?
In line with the report, the withdrawal raised considerations about Hong Kong’s progress in attracting crypto-related firms and growing a thriving Web3 ecosystem. Town started efforts to turn into a crypto hub in late 2022.
Legislative Council member Duncan Chiu, who represents the data expertise sector, mentioned the withdrawal had shaken the market’s confidence in native Web3 growth. Regardless of hoping to achieve entry to prospects from mainland China, Beijing maintains a strict ban on industrial crypto actions on the mainland.
Monetary authorities in Shenzhen, a metropolis neighboring Hong Kong, just lately issued a warning towards cross-border cryptocurrency buying and selling, stressing that such actions are “unlawful and topic to prison legal responsibility.”
The message additionally highlighted the risks of encryption fraud and reiterated the illegality of offering web companies to mainland prospects with out permission.
General, Hong Kong’s granting of preliminary approval to exchanges represents a major step within the metropolis’s regulatory journey in direction of turning into a hub of innovation. Nevertheless, issues stay, together with exit exchanges with ties to mainland China and Beijing’s strict ban on industrial digital asset actions.
The way forward for Hong Kong’s digital asset market will rely on putting a steadiness between regulatory compliance, market confidence and attracting enterprise to the evolving international crypto panorama.
At press time, the market’s largest cryptocurrency, Bitcoin, is buying and selling at $69,200 after briefly rising to $70,400 within the early hours of Monday’s buying and selling session.
Featured picture from Unsplash chart from TradingView.com
