Hong Kong Exchanges and Clearing Limited (HKVAX) is the first exchange to be licensed under the territory's new licensing regime, with 16 more exchanges awaiting approval.
The Hong Kong Virtual Asset Exchange (HKVAX) has become the third cryptocurrency exchange to be licensed by the Securities and Futures Commission (SFC) of the Hong Kong Special Administrative Region to serve retail customers, and the third exchange in Hong Kong to obtain a full license.
HKVAX has obtained Type 1 (dealing in securities) and Type 7 (providing automated trading services) Virtual Asset Trading Platform (VATP) licenses, as well as an Anti-Money Laundering and Counter-Terrorism Financing license to operate a virtual asset trading platform.
HKVAX is a minority
HKVAX’s core services include over-the-counter trading, trading platforms, and fully insured custody. In addition, the company also specializes in security token issuance (STO) and real-world asset (RWA) tokenization. Anthony Ng, co-founder and CEO of HKVAX, said in a statement:
“We are part of a revolution in the financial landscape that aims to establish Hong Kong as a hub for STOs and RWAs in Asia and beyond.”
However, HKVAX warned on its website that “final preparations are underway for our trading platform and onboarding system.”
Cryptocurrency exchanges OSL and HashKey were licensed under the old opt-in system in 2020 and 2022, respectively. Retail cryptocurrency trading began in Hong Kong in August 2023.
HKVAX received in-principle approval from the Hong Kong Securities and Futures Commission in August 2023 and is the first exchange to be licensed under the current licensing system. Exchanges applying for licenses must submit their applications by February 8, otherwise they will be closed.
Sixteen companies are awaiting decisions on their VATP applications, 16 of which are already operating on a "deemed licensed" basis, despite the SFC posting warnings on its website discouraging people from doing business with them.
Hong Kong selectively leads the world
Retail investors in Hong Kong have only four cryptocurrencies to choose from, and despite Hong Kong's repeated statements that it wants to become a global fintech hub, its regulatory efforts have been criticized for being slow.
Source: Hong Kong Virtual Asset Exchange
On the other hand, stablecoin legislation is in the works, and the Hong Kong Monetary Authority is one of the founding members of the mBridge project and operates a sandbox with the participation of many leading global financial institutions.