Hong Kong’s crypto ambitions tested by licensing issues: report

The ambitions of Hong Kong’s crypto hub are dealing with hurdles as greater than a dozen exchanges wrestle to safe full licenses resulting from regulatory issues.

Cryptocurrency exchanges in Hong Kong seem like grappling with challenges in securing full licenses as town strives to grow to be a crypto hub, in keeping with a Bloomberg report, citing individuals aware of the matter.

The town’s Securities and Futures Fee reportedly discovered unsatisfactory practices throughout on-site inspections of 11 exchanges deemed to be licensed, elevating questions on their skill to fulfill full licensing necessities. The investigation discovered that some exchanges have been overly reliant on a small variety of executives to handle the custody of consumer belongings, whereas others didn’t “correctly defend themselves in opposition to the dangers of cybercrime,” the report mentioned.

The exchanges underneath scrutiny reportedly embody massive names comparable to Crypto.com and Bullish, in addition to native buying and selling platforms comparable to HKbitEX and PantherTrade.

Thus far, solely two platforms – OSL and HashKey – are absolutely licensed in Hong Kong. Though the SFC goals to problem extra licenses by the top of 2024, the method has already led to the withdrawal of twelve purposes, together with these from Bybit, Huobi HK and OKX.

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Hong Kong is inspecting rules for crypto exchanges

The SFC’s findings come because the regulator intensifies efforts to implement strict compliance from crypto platforms, with a selected emphasis on defending consumer belongings and implementing strong know-your-client protocols.

This heightened scrutiny follows a scandal surrounding JPEX, an unlicensed crypto platform accused of defrauding greater than 2,600 victims of greater than $200 million. The SFC beforehand reported that JPEX and crypto influencers had made false or deceptive claims on social media, falsely implying that the alternate had utilized for a digital asset buying and selling platform license in Hong Kong.

Nonetheless, the regulator later emphasised that JPEX had not submitted such an utility, regardless of its claims that it was a “licensed and acknowledged platform for facilitating buying and selling in digital belongings and digital currencies.”

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