Hong Kong, Wednesday, September 4, 2024 – Hong Kong’s bid to establish itself as a digital-asset hub faces significant challenges, with 11 cryptocurrency exchanges under scrutiny by the Securities and Futures Commission (SFC), a news report said.
These exchanges, which received initial approval earlier this year, are now being closely inspected for compliance with regulatory standards. Concerns have been raised about issues such as excessive reliance on key executives for asset custody and insufficient cybersecurity measures.
The SFC’s inspections, which began in June, revealed that some platforms may not meet the necessary criteria to obtain full licenses. While the identities of the non-compliant exchanges remain undisclosed, the SFC has warned that failure to address these deficiencies could result in the revocation of provisional licenses or rejection of full applications.
The affected exchanges, including notable names like Crypto.com and Bullish, cannot onboard new clients until they secure full licenses, expected by the end of 2024.
Currently, only two platforms, OSL and HashKey, hold full licenses in Hong Kong. The SFC has emphasized the importance of safeguarding client assets and implementing robust know-your-client (KYC) processes.
So far, 12 exchanges, including Huobi HK and OKX, have withdrawn from the licensing process, highlighting the regulatory hurdles in Hong Kong’s push to become a leading digital-asset hub.
