The Hong Kong Securities and Futures Commission (SFC) has intensified its efforts to license cryptocurrency platforms in a bid to create a more regulated environment for crypto exchanges by the end of this year.

Evaluation of Platforms by Hong Kong SFC

The Hong Kong SFC is currently reviewing up to 11 crypto platforms for licensing. SFC CEO Julia Leung noted that these platforms are undergoing onsite evaluations and are in a 'deemed to be licensed' status. This is part of the regulator's two-year plan to improve industry regulation by issuing licenses in batches by year-end. Non-compliant platforms risk losing their licensing opportunities.

Uncertainty in Hong Kong's Crypto Industry

Despite SFC's efforts, many stakeholders criticize the licensing process for being overly stringent. Companies such as OKX and Bybit withdrew their applications citing harsh requirements. The recent collapse of Dubai-based JPEX highlighted the need for increased transparency, leading the regulator to create lists of licensed and suspicious exchanges.

Future of Cryptocurrency Regulation in Hong Kong

The regulator plans to finalize its regulatory framework by year-end, focusing on over-the-counter trading and custody services. Meanwhile, the SFC continues to explore tokenization of traditional products and Web3 technologies to ensure market fairness.

With the tightening of crypto regulations, the SFC aims to create an open and safe environment for investors and platforms while strengthening its regulatory framework.