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Cryptocurrency exchange OKX has entered the final stage of obtaining a Virtual Asset Service Provider (VASP) license in Hong Kong. The exchange is awaiting final approval for a VASP license until March 2024. The Securities and Futures Commission of Hong Kong has imposed strict requirements on customer protection and the obligation to keep a significant portion of assets in cold wallets. According to many cryptocurrency exchange executives, the regulatory authority in Hong Kong applies very strict rules.
OKX Starts Infrastructure Work
Li Zhikai, OKX’s Global Chief Commercial Officer, stated in an interview that they are actively engaging with banks and are expecting a license and the start of operations for the group. The cryptocurrency exchange has initiated preparations such as technology infrastructure within the country.
Hong Kong became a crypto-friendly country in 2023 and announced a licensing program for cryptocurrency exchanges to offer services to retail customers. Initially, over 80 crypto firms showed interest in opening an office in the country, but only a few platforms such as HashKey and OSL obtained the necessary license to start retail cryptocurrency trading services.
BTC and ETH Only Available
HashKey launched retail crypto trading services for Hong Kong users on August 28. The regulatory authority in the country only allows Bitcoin and Ethereum to be offered to retail customers to reduce the risk associated with investing in new crypto assets. The regulations also impose a 30% limit on investors, allowing them to invest only one-third of their net income.
In addition to HashKey and OSL, Huobi and Gate.io have also applied for retail crypto trading services and are awaiting regulatory approval. A Gate.io executive previously shared their experience with the regulatory authority in Hong Kong, stating that the Securities and Futures Commission of Hong Kong has stricter requirements for virtual asset service providers compared to other regulatory bodies.
The regulatory authority has made it mandatory for crypto platforms to provide insurance and compensation regulations to assist in customer protection. Additionally, according to the regulatory authority, crypto exchanges must keep 98% of assets in cold wallets.
