Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has thrown a lifeline to 11 cryptocurrency exchanges, giving them the green light to keep the digital gears turning. This is a prelude to possibly securing full-blown Virtual Asset Trading Platform (VATP) licenses, the first since 2022.
Among the exchanges still in the race, Crypto.com stands tall. Born in Hong Kong but now strutting its stuff from Singapore, it’s the heavyweight contender, rubbing shoulders with only a couple of others that can cater to retail customers. HashKey snagged a license back in 2022, but now it’s Crypto.com’s turn to shine under the new regulations that came into play last year. The rulebook says exchanges must keep the lights on and stay operational while their license applications are in limbo, but come June 1, those not seeking a license were shown the exit.
Interestingly, Crypto.com is the lone wolf from the top 20 exchanges by 24-hour trading volume, as ranked by CoinGecko, still pushing for a Hong Kong license. Its next biggest rival in this bureaucratic dance is Bullish, a nomad of sorts, with roots in Gibraltar but operations stretching from Singapore to New York. Bullish has Hong Kong in its sights, too, regularly gracing the city’s crypto events and even planning to host the prestigious Consensus conference there next year, courtesy of its acquisition of CoinDesk.
Meanwhile, the SFC’s silence on the fate of six other VATP hopefuls has left the crypto crowd guessing. The approval sprinkle comes on the heels of a few big names pulling the plug on their license bids, dashing Hong Kong’s dream of becoming the next big crypto haven, vying with the likes of Singapore or Dubai.
The defections mainly involve exchanges with roots in mainland China. Beijing’s hammer on digital tokens sent these companies scurrying to friendlier shores. OKX, Binance, HTX, KuCoin, Gate.io, and Bybit, the latest to bow out on May 31, have all waved goodbye. The SFC’s recent edict urging exchanges to block mainland Chinese from crypto access has further deflated the mood. An industry insider spilled to the Post that this restriction was a major buzzkill for those eyeing Hong Kong as a crypto paradise.
Legislative Council member Duncan Chiu, in a fiery op-ed for the Hong Kong Economic Journal, warned that these exits have rattled the market’s faith in the local Web3 landscape. Many crypto players had harbored dreams of using Hong Kong as a backdoor to the vast mainland market. But Beijing’s no-nonsense ban on crypto commerce stands firm.
In a dramatic flourish, Shenzhen’s financial overseers, just a stone’s throw from Hong Kong, issued a stark warning against cross-border crypto shenanigans. The local Financial Supervision and Administration Bureau, painting a grim picture of rising crypto fraud, reiterated that crypto activities are a legal no-man’s land in China, attracting severe penalties. It reminded all and sundry that providing online services to mainlanders without a green light is a big no-no. This stance is a throwback to 2021 when the People’s Bank of China slammed the door on foreign exchanges serving mainland citizens, sending shockwaves through the market.
As Hong Kong’s crypto odyssey unfolds, the city’s ambitions hang in a delicate balance, teetering between regulatory strictness and the digital frontier’s uncharted waters.
(Source: 99 Bitcoins | Bloomberg | Coin Telegraph)
