Two cryptocurrency exchanges have received licenses to operate in Hong Kong, marking the first regulatory approvals of 2025 as the city continues its push to formalise its virtual asset trading sector.
According to the Hong Kong Securities and Futures Commission’s (SFC) official database, crypto exchanges PantherTrade and YAX were granted operational licenses on January 27 under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), bringing the total number of licensed platforms to nine.
The approvals come roughly a week after Executive Director of the Intermediary Department of the Hong Kong Securities and Futures Commission, Ye Zhiheng teased that the SFC was looking to issue more licenses within the first quarter of 2025.
At the time, Ye, who is also the Chairman of the country’s Fintech Advisory Group, said the commission was evaluating 11 applicants from nearly 30 firms that applied, out of which only those that meet the regulator’s stringent requirements would be granted a license.
On June 1, 2024, Hong Kong officially wrapped up its grace period for crypto exchanges to apply for a virtual asset service provider (VASP) license.
After that deadline, any platform without the “deemed to be licensed” status from the SFC was considered illegal.
Just days before the cutoff, the SFC announced plans to ramp up enforcement, including conducting on-site inspections to ensure applicants were properly safeguarding client funds and complying with regulatory standards.
Ye confirmed that the SFC had completed on site inspections of almost all of the applicants and had notified the applicants of all the requirements they’d have to full fill.
In August, Invezz reported that the regulator found some of these platforms were not managing cybersecurity risks properly and warned that it could lead to their temporary licenses being revoked.
Several notable platforms like OKX and HTX had also withdrawn their applications after failing to comply with the mandates in place.
Last month, the Hong Kong SFC issued licenses for Accumulus GBA Technology, DFX Labs, Hong Kong Digital Asset EX, and Thousand Whales Technology.
Despite getting a license, crypto exchanges in Hong Kong are only allowed to offer a handful of cryptocurrencies.
Currently, locals only have access to Bitcoin (BTC), Ethereum (ETH), Avalanche (AVAX), and Chainlink (LINK).
Demand for crypto in Hong Kong
The recent developments come amid signs of a growing appetite for crypto in Hong Kong.
A recent survey conducted by the Hong Kong brokerage firm Futu Securities spotlighted that young investors prefer owning Bitcoin over real estate.
Further, on January 13, Hong Kong-based public construction firm Ming Shing Group revealed its wholly-owned subsidiary, Lead Benefit, had allocated $47 million towards an investment in Bitcoin.
In November, ZA Bank, the city’s largest virtual bank, introduced services allowing retail users to trade Bitcoin and Ether using the Hong Kong Dollar.
There have also been calls for the creation of a strategic Bitcoin reserve.
As previously reported by Invezz, Legislative Council member Wu Jiexhuang has advocated for the creation of a Bitcoin backed reserve by leveraging Hong Kong’s unique position under the one country, two systems.
He said:
If it is observed that the US continues to increase its Bitcoin holdings, the Hong Kong government should carefully consider holding a proportionate amount of Bitcoin in its reserves.
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