Hong Kong’s stringent VASP licensing process could soon see another successful applicant as OKX crypto exchange progresses into its final stage.
The Final Stretch for OKX
OKX cryptocurrency exchange, one of the leading platforms globally, is in the concluding phase of obtaining the virtual asset service provider license (VASP) in Hong Kong. The exchange is optimistic about gaining the final approval by March 2024.
In an exclusive conversation with us, Li Zhikai, OKX’s global chief commercial officer, shared that the platform is in active discussions with the banks. OKX is now poised, waiting for the license issuance to commence its operations. Behind the scenes, the groundwork, including technology docking, is already in motion.
Hong Kong’s Crypto Landscape
The landscape for cryptocurrencies in Hong Kong underwent a sea change in 2023. The region declared itself a pro-crypto nation, revealing a licensing mechanism for crypto exchanges catering to retail clients. From the plethora of over 80 crypto entities keen on inaugurating an office here, only a few like HashKey and OSL have so far procured the license essential for initiating retail crypto trade.
HashKey made waves by rolling out its retail crypto trading services to Hong Kong’s audience on Aug. 28. However, to mitigate potential investment hazards associated with emerging crypto coins, the national regulatory body has only sanctioned trading in Bitcoin (BTC) and Ether (ETH) for the retail populace. Another noteworthy regulation limits investors, permitting them to allocate merely one-third of their net earnings.
Waiting in the Wings
Besides the frontrunners HashKey and OSL, other prominent names like Huobi and Gate.Io are in the queue, hoping to receive the much-coveted regulatory green light. Notably, a senior executive from Gate.Io shared insights into their regulatory journey in Hong Kong. The feedback revealed that the Hong Kong Securities and Futures Commission (SFC) maintains a higher benchmark for VASPs compared to its global counterparts. An indispensable mandate is for crypto exchanges to have insurance/compensation arrangements, safeguarding their clientele. Additionally, these platforms are obligated to store a whopping 98% of assets in cold wallets.