August 15, 2023
By Sharan Kaur Phillora
Hong Kong’s principal financial watchdog, the Securities and Futures Commission (SFC), has provisionally sanctioned the Hong Kong Virtual Asset Exchange (HKVAX) to function under the city’s securities regulations. This monumental move comes as Hong Kong makes decisive steps in refining the rules governing the burgeoning digital asset landscape.
Here’s what we know:
In an announcement on August 11th, HKVAX disclosed its “approval-in-principle” for Type 1 and Type 7 regulated operations from the SFC. This means that, under the Type 1 license, the platform has the green light to establish a digital asset exchange dealing primarily in securities. The Type 7 license will empower HKVAX to deliver automated trading solutions to both ordinary consumers and sophisticated institutional clientele.
HKVAX’s ambitions don’t stop there. The exchange plans to introduce “security token offerings,” capitalizing on Web3-based investment avenues. Upon securing the final go-ahead, HKVAX pledges to provide an over-the-counter (OTC) brokerage facilitating fiat-to-digital asset transactions, a high-caliber trading platform, and a fully insured asset custody system.
Anthony Ng, the CEO, and co-founder of HKVAX, expressed optimism about the platform’s growth trajectory, hinting at prospective product expansion within Hong Kong and engagements with strategic backers in subsequent funding phases.
This recent update follows closely on the heels of the pioneering moves made by HashKey and OSL, which, on August 3, emerged as the first-ever platforms to clinch the mandatory permits for cryptocurrency trading in the city.
Post the FTX exchange debacle in 2022, Hong Kong’s regulatory authorities have taken a keener interest in the crypto sphere. Julia Leung Fung-yee, the Chief Executive of SFC, acknowledged the paramount significance of crypto trading within the virtual asset ecosystem in a speech on June 24. Emphasizing the importance of the newly minted licensing regime, Leung stated that such measures are pivotal in safeguarding investor interests.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
