11 Crypto Platforms Under Review as Hong Kong Faces Criticism on Strict Regulations

The Hong Kong Securities and Futures Commission (SFC) plans
to approve more cryptocurrency exchanges by the end of the year, according to
CEO Julia Leung.

Speaking to local outlet HK01 on October 6, Leung noted that
11 platforms seeking licenses have undergone on-site reviews. She expects
further progress in their applications before 2024 ends.

This follows the approval of the local exchange HKVAX, which
aims to launch in Q4 2024. It is the third exchange to gain regulatory approval
in Hong Kong. It joins HashKey and OSL, which upgraded their previous licenses.
Bullish, the parent company of CoinDesk, has also applied for a license.

Hong Kong’s Crypto Uncertainty Grows

The total number of applicants remains unclear. The SFC’s
website lists either 11 or 16 platforms under the new licensing rule. The
approval process has faced criticism for being too strict, which some argue
could delay Hong Kong’s goal of becoming a crypto and web3 hub.

In August, reports highlighted “unsatisfactory practices” at
some exchanges, such as limited executive oversight of client assets and weak
cybercrime defenses. Despite an invitation for major players like Coinbase to
set up in Hong Kong, companies
such as OKX and Bybit withdrew their applications in May.

The South China
Morning Post reported that this may have been due to SFC requirements
preventing mainland Chinese residents from accessing their services.

📰 Julia Leung, the chief executive of the Hong Kong Securities and Futures Commission, shared with HK01 that the regulator hopes to make progress by the end of the year, including the issuance of licenses in groups. pic.twitter.com/EAw8tWmwmk

— The Roundtable – Web3/NFT/Crypto (@0xRoundTable) October 7, 2024

JPEX Collapse Prompts Regulatory Changes

The SFC has also been criticized for its handling of rogue
exchanges. Last year, the
collapse of JPEX led to over 2,600 Hong Kong residents losing around $200
million. This incident prompted the SFC to publish lists of licensed and
suspicious platforms to increase transparency, as reported by Finance Magnates.

The commission is now exploring regulations for
over-the-counter crypto trading and custody services, with industry input
being sought.

This article was written by Tareq Sikder at www.financemagnates.com.