OKX, a prominent cryptocurrency exchange, is on the cusp of obtaining a Virtual Asset Service Provider (VASP) license in Hong Kong. The exchange anticipates final approval for this license by March 2024, marking a significant development in the crypto landscape of the region.
Active Engagement with Banks
Li Zhikai, the Global Chief Commercial Officer of OKX, disclosed that the exchange is actively engaged in dialogue with local banks. Their discussions center on the issuance of the VASP license and the subsequent commencement of crypto trading operations. In preparation, OKX has initiated necessary technological integration.
Hong Kong made a decisive move towards embracing cryptocurrencies in 2023 when it introduced a licensing framework for crypto exchanges to offer services to retail customers. This regulatory shift garnered substantial interest, with over 80 crypto firms initially expressing intent to establish a presence in Hong Kong. However, only a select few, including HashKey and OSL, succeeded in securing the requisite licenses for retail crypto trading.
HashKey Leads the Way
HashKey, having obtained approval, commenced retail crypto trading services for Hong Kong users on August 28. The regulatory authority has initially limited trading to Bitcoin and Ethereum, a precautionary measure to mitigate risks associated with newer crypto tokens. Furthermore, investors are subject to a 30% cap, allowing them to invest a maximum of one-third of their net income.
While HashKey and OSL have made headway, other exchanges like Huobi and Gate.io have submitted applications for retail crypto trading services and await regulatory approval. Notably, Gate.io’s executive highlighted that the Hong Kong Securities and Futures Commission imposes stringent requirements on virtual asset service providers. These requirements encompass mandatory insurance and compensation arrangements designed to safeguard client interests. Additionally, crypto exchanges must ensure that 98% of their assets are stored securely in cold wallets.