- Hong Kong Digital Asset Xchange Limited (HKDAEx) applied for the license despite the deadline on May 31, 2024.
- Hong Kong’s regulator has found unsatisfactory practices at some crypto exchanges seeking full licenses.
The Hong Kong Securities and Futures Commission (SFC) granted a virtual asset trading platform (VATP) license to Hong Kong Digital Asset Xchange Limited (HKDAEx) on August 27, regardless of passing the official deadline for applications on May 31, 2024.
The Securities and Futures Commission (SFC) introduced a new licensing framework in June 2023, with all the virtual asset trading platforms operating in Hong Kong to submit their applications by February 29, 2024. Moreover, warned to face a mandatory shutdown by May 1, 2024.
However, despite the deadline, firms like HKDAEx continued to submit their applications to comply with the regulatory framework.
The Securities and Futures Commission (SFC) shall return the application if it is incomplete. Also if there are unresolved fundamental issues. The SFC has recently identified “unsatisfactory practices.” As several cryptocurrency exchanges are seeking full licenses after conducting on-site inspections.
A spokesperson of SFC stated that inspections been conducted, though they are ongoing and subject to change. SFC mentions that platforms that are unable to address critical deficiencies during inspections will reject the license applications or lose the provisional licensing status. However, the SFC kept unrevealed which exchanges are with these deficiencies.
SFC’s Reduced Barriers
Hong Kong positions itself as a leading crypto hub in Asia; its regulatory body clarified that only firms meeting its standards be allowed to operate. Hong Kong’s move towards a more regulated crypto market has seen mixed reactions.
Amid that, the Stock Exchange of Hong Kong Limited (HKEX) and Securities and Futures Commission (SFC) have announced a short-term relaxation of the minimum market capitalization requirements for Specialist Technology Company IPOs and the third-party investment requirements for Special Purpose Acquisition Companies (SPACs) seeking to undertake de-SPAC transactions. This applies for an initial period of three years, from September 1, 2024, to August 31, 2027.
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