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Crypto exchanges wishing to do business in Hong Kong must apply for a license from the Securities and Futures Commission's virtual asset trading platform system by February 29.
As of the deadline, 22 crypto exchanges have VATP applications pending with the SFC, including OKX, Bybit, Huobi HK, Gate.HK and Binance-affiliated HKVAX.
“Not all VATP applicants on this list are licensed or regulated by the SFC and may not meet the SFC's requirements,” the regulator said in an update on its website. “The purpose of this list is to ensure that any member of the public misrepresents or misrepresents the status of a virtual asset trading platform's license application with the SFC.”
Exchanges that have not submitted a VATP application must withdraw from the Hong Kong market by May 31. Four exchanges have had their applications canceled or withdrawn since the city opened for retail business in June 2023. Likewise, VATP applications rejected by the SFC must vacate the Exchange City within three months. Currently, the only exchanges authorized by the SFC in Hong Kong are OSL and HashKey.
Cointelegraph in 2016 By 2023, Web3 companies are reportedly spending up to $25 million on the necessary infrastructure and regulatory framework for Hong Kong's VATP license. In addition to cash segregation requirements, exchange applicants must insure at least 50% of clients' assets and regularly audit their financial statements.
Despite regulatory requirements, unlicensed exchanges are problematic in Hong Kong. In the year In 2023, JPEX and Hounax – the two largest crypto exchanges in Hong Kong – collapsed after allegations of Ponzi schemes were made. An estimated $180 million of investor money was lost in the JPX scandal, and 145 victims lost a total of $18.9 million to the Honax scam. Although authorities have frozen some funds linked to JPEX and Hounax, most investors' money is still missing.
In the year On February 26, another Hong Kong crypto exchange, BitForex, came under fire after it stopped redeeming users and withdrew $56 million from hot wallets. The exchange has stopped responding to user queries, and an investigation is underway.
APAC exchanges continue to expand.
Crypto exchanges of Asia-Pacific origin continue their expansion efforts in the ongoing bull market.
In the year On February 27, crypto exchange OKX announced the launch of OKX Turkey with fiat on-ramp onboarding to the Turkish lira, alongside direct bank deposits and withdrawals for Turkish users.
“We are pleased to offer Turkish users a powerful platform to trade major cryptocurrency pairs, including USTD/TRY, BTC/TRY and ETH/TRY, and provide users with advanced crypto features,” the exchange said in a statement. “With a crypto adoption rate of nearly 50%, Turkey represents a very dynamic and promising market for the industry as it continues to grow,” added OKX President Hong Fang.
Meanwhile, crypto exchange Bitget reported a 540% increase in trading among its users in Southeast Asia in Q4 2023.
By 2023, the total transaction volume will exceed $3.14 trillion, the exchange wrote. “Specifically, spot transaction volume rose to $81.6 billion, an impressive 94 percent growth despite market turmoil. In September 2023, the exchange announced a $100 million Web3 fund to accelerate Asia-based projects and protocols.
After years, crypto exchange HTX (formerly Huyo Global) is back in business pending expansion into Hong Kong, as revealed in a February 26 VATP filing.
A day ago, Sun.io, the largest DeFi platform in the Tron ecosystem, announced a strategic partnership with HTX DAO to increase the value locked to a total of 100 million dollars for liquidity.
“Through this partnership, HTX DAO is expected to contribute 50% of the quarterly cash donations it receives to the HTX-TRX Liquidity Pool (LP), with at least 80% allocated to SUN.io,” the forum wrote.
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Hong Kong has allocated 383 million dollars for Cyberport
Hong Kong authorities are allocating 3 billion Hong Kong dollars ($383 million) over the next three years for the Cyberport Business Park initiative, which will put a heavy focus on AI.
“Cyberport is accelerating the establishment of an AI supercomputing center to meet the computing power needs of research institutions and industry,” officials said in a February 29 budget announcement.
“By early 2026, the computing power of the supercomputing facility is expected to reach 3,000 petaFLOPS. This kind of power is equivalent to the ability to process about 10 billion images in one hour.
In the year Launched in 2023, Cyberport is a Hong Kong government-backed initiative to encourage Web3 and AI companies to relocate to the city and implement digital solutions for small and medium-sized businesses in Hong Kong. Soon after the program started, more than 150 enterprises relocated to the city.
The digital yuan multi-chain bridge will be launched this year
China's digital yuan central bank digital currency will include a novel multi-chain bridge in 2023.
In the year According to local news reports on February 28, the device – called Embridge – will allow digital yuan to be exchanged for other CBCCs in cross-border trade between China, Hong Kong and foreign countries. In addition, Hong Kong's Financial Secretary Paul Chan Mo-po said local residents could expand their use of Chinese digital yuan wallets for shopping activities and tourism expenses in China.
In the year In December 2023, China reached a $400 million agreement with the United Arab Emirates to exchange each country's CBCC during bilateral trade. In the year In July 2023, Chinese President Xi Jinping expressed the need for countries that are friendly with China to expand local currency settlements for mutual trade:
“The Chinese side proposed to expand the share of SCO domestic currency settlements [Shanghai Cooperation Organization] countries, promote cooperation on sovereign digital currency, and promote the establishment of SCO development banks.
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Zhiyuan Sun
Zhyuan Sun is a reporter at Cointelegraph, focusing on technology-related news. He has several years of experience writing for major financial media outlets such as The Motley Fool, Nasdaq.com and Seeking Alpha.
