Hong Kong Grants Licenses to Four New Crypto Exchanges

Hong Kong is advancing its cryptocurrency regulation efforts. On December 18, the Securities and Futures Commission (SFC) granted operating licenses to four virtual asset trading platforms (VATPs), increasing the total number of licensed exchanges in the region to seven.

The newly approved platforms—Hong Kong Digital Asset EX Limited, Accumulus GBA Technology Co., Limited, DFX Labs Company Limited, and Thousand Whales Technology—must comply with a stringent regulatory framework requiring all VATPs to obtain full licenses before providing services.

Expedited Licensing Process and Key Conditions

The four new exchanges were approved through an expedited licensing process that followed months of risk-based on-site inspections to ensure compliance with regulatory requirements.

While operational, the SFC has imposed temporary restrictions on these platforms until they resolve key issues identified during inspections. The companies must also perform independent vulnerability assessments and penetration tests to confirm system security.

According to a Finance Magnates report, Eric Yip, the SFC’s Executive Director of Intermediaries, stated that the regulator has been engaging with VATPs' management to ensure adherence to standards.

“We have been proactively engaging with VATPs’ senior management and ultimate controllers, which helps drive home our expected regulatory standards and expedite our licensing process for VATPs,” he said.

Next Steps for New Licensees

The SFC aims to balance investor protection with the development of Hong Kong’s virtual asset market. It will oversee a second assessment phase for the newly licensed exchanges, requiring them to address outstanding issues and demonstrate compliance with strict regulatory standards. Restrictions will be lifted once the SFC is satisfied with their performance.

Hong Kong's regulatory push reflects its ambition to become a global hub for digital assets. Influential figures like Johnny Ng, a member of the Legislative Council, are advocating for Bitcoin integration into the nation's financial reserves. Ng believes that this could enhance Hong Kong's economic framework if supported by appropriate regulatory measures.

His proposal is influenced by Donald Trump’s keynote speech at the Bitcoin Conference 2024, where Trump pledged to include Bitcoin in US reserves if re-elected as president.