- Application and Licensing Details
- Platform Requirements and Rules
- New Guidelines for Custodial Services
The Hong Kong Securities and Futures Commission (SFC) has granted a digital asset exchange license to Hong Kong Digital Asset Exchange (HKDAEx) despite the official deadline having passed.
Application and Licensing Details
HKDAEx submitted its license application on August 27, a full three months after the May 31 cutoff date. This unexpected move has left many wondering what’s really happening behind the scenes at the SFC. Did they bend their own rules, or is there more to this story? The regulators might still return the application if they think it’s incomplete or there are some basic issues that haven’t been sorted out yet.
Platform Requirements and Rules
Starting June 1, 2023, all Virtual Asset Trading Platforms (VATPs) need a license to operate in Hong Kong. So far, only a handful of firms have managed to get through the hoops, while many applications are still being processed. There are also stringent requirements known as the “Crypto Travel Rule.” Any virtual asset transfer over HK$8,000 (around $1,000) requires extensive paperwork. Service providers have to share all transaction data, no questions asked.
New Guidelines for Custodial Services
The Hong Kong Monetary Authority (HKMA) has been laying down regulations for stablecoin issuers since early 2024. They have set up a comprehensive regulatory regime that mandates: "If you’re issuing fiat-referenced stablecoins, you need to be locally incorporated, have enough financial resources, and follow good governance standards." The HKMA has even established a regulatory sandbox, allowing only selected participants to join, as a way to test their capabilities under controlled conditions. Following a public consultation that wrapped up in July, they are now preparing to take a new proposal to the Legislative Council. Custody is another hot topic. Back in February, the HKMA issued new guidelines for digital asset custodians. They aim to strengthen governance, improve asset segregation, and tighten risk management practices.
The introduction of new rules and licenses for digital asset trading and custodial services in Hong Kong underscores the regulators' commitment to ensuring safety and stability in this sector.
Comments