Hong Kong’s ‘Deemed to Be Licensed’ Crypto Alternate Checklist Sparks Debate on Laws

On June 1, Hong Kong’s Securities and Futures Fee (SFC) unveiled a checklist of cryptocurrency trade platforms with licenses nearing approval.

In accordance with the SFC web location, 11 applicants, including Matrixport HK, Accumulus, Crypto.com, and Bullish, are “deemed to be licensed.” Other platforms on the list are HKbitEX, PantherTrade, DFX Labs, Bixincom, xWhale, YAX, and WhaleFin.

Hong Kong’s Stringent Requirement Dissuades High Exchanges

If accredited, these corporations will bring the selection of licensed exchanges in Hong Kong to 13. Currently, fully OSL Alternate and HashKey retain licenses granted forward of the contemporary regulations took cease in June 2023.

Then as soon as more, the SFC clarified that these “deemed to be licensed” exchanges are now no longer yet formally licensed. Furthermore, it informed investors to be cautious when procuring and selling on these platforms, as they could presumably furthermore simply now no longer earn a license and would possibly presumably furthermore want to cease operations in Hong Kong.

Correct by plot of the final one year, Hong Kong has aimed to change proper into a digital asset hub. Then as soon as more, its strict principles, whereas designed to provide protection to investors and forestall money laundering and terrorism financing, own created valuable limitations for plenty of exchanges. Reports point to that the SFC beneficial its trade license applicants to present sure that they originate now no longer produce their merchandise readily available to mainland Chinese language customers, even supposing China has banned crypto.

These stringent requirements own led critical exchanges admire OKX, Gate.io, KuCoin, Binance, and HTX (formerly Huobi) to withdraw their applications for a digital asset procuring and selling platform (VATP) license in Hong Kong.

Learn more: 11 Simplest Crypto Exchanges and Apps for Rookies in 2024

Notably, these platforms’ withdrawals own drawn scrutiny to SFC’s utility activity coping with. Hong Kong legislator David Chiu questioned whether or now no longer the metropolis can indubitably change proper into a hub for monetary innovation given the diverse restrictions imposed at this early stage.

“Many commercial insiders are alarmed that the contemporary licensing machine will flip proper into a duplicate of the ‘food truck incident’ or even change proper into a case of the government’s promotion of digital banks, with grand ado about nothing. They’re alarmed that the authorities will repeat the identical errors and that although operators are granted licenses, this is able to presumably furthermore very effectively be advanced for them to originate a income mannequin,” Chiu reportedly said.

Learn more: Crypto Laws: What Are the Advantages and Drawbacks?

Furthermore, Chiu claimed that the contemporary licensing machine shakes market self assurance. He identified that many approval prerequisites borrow from damaged-down finance, which is simply too strict for Web3. The commercial’s response to these challenges will be valuable in shaping the most effective plot forward for cryptocurrency exchanges within the quandary.