Hong Kong authorities plan to license more digital asset exchanges by the end of 2024 after a thorough five-month inspection period. Eric Yip, executive director at the Securities and Futures Commission (SFC), announced this during the annual Fintech Week event.
Yip noted that most applicants have taken the SFC’s feedback seriously, showing a commitment to resolve issues and operate within a regulated environment. Despite this positive outlook, progress has been slow.
Yip said, “In only five months, we have completed all the on-site inspections and provided feedback to the applicants. During the inspection, the SFC has been able to learn about these firms’ state of compliance first-hand, and directly engage with their personnel and, more importantly, their ultimate controllers to facilitate their understanding of our expectations.”
Currently, only three exchanges are fully licensed, with 11 others considered “deemed-to-be-licensed.” Inspections revealed some unsatisfactory practices at these firms since they received provisional approvals earlier this year.
Once these digital asset exchanges address the SFC’s concerns, they can receive licenses for limited operations. Yip emphasized that a third-party review must be completed before these restrictions are lifted. By early 2025, the SFC plans to form a consultative panel with licensed exchanges to enhance cooperation.
In another announcement, Hong Kong Exchanges and Clearing Ltd. plans to launch a Virtual Asset Index Series to offer benchmarks for Bitcoin and Ether pricing in the Asia-Pacific region.
This move is part of Hong Kong’s effort to establish itself as a leading digital-asset hub following a political crackdown that affected its appeal.
Also Read: Hong Kong to enhance its Digital Asset Rules in 18 Months
