Outside Source
Key Takeaways:
- Hong Kong SFC released this year’s first crypto licenses by going on with its strict regulatory activities.
- The licensing procedure in Hong Kong is considered very demanding and it is done based on the safety of the investors and the anti-money laundering policies.
- Hong Kong’s development as a crypto hub has lagged behind markets like Singapore.
In January, the Hong Kong Securities and Futures Commission (SFC) issued its first cryptocurrency trading licenses of the year to PantherTrade and YAX, reaffirming its commitment to a regulated digital asset environment. The authority started the cycle in the middle of 2024 and since then, it has issued seven licenses, thus reaffirming the importance of serving both, the exploration of new pathways, and the protection of an investor.
The New Licensees: PantherTrade and YAX
Two new exchanges, namely PantherTrade and YAX, have just obtained their licenses and are both based out of Hong Kong where they have registered under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). The registration is a vital part, proving the SFC’s interest in rooting out financial crimes from cryptos. PantherTrade has a physical office in Hong Kong and is backed by Cheetah, a major Chinese internet company. Similarly, YAX Hong Kong performs as a daughter company to Tiger Brokers Hong Kong Global Limited, a well-reputable internet brokerage.
Indeed, the fact that the background company is prominent and its financial muscle has been referred to by the SFC in its statement is indicative of the fact. Nevertheless, in its official statement the SFC wrote: “The publication of this list by the SFC does not constitute a guarantee for the performance or credibility of any virtual asset trading platform licensed by the SFC.” The SFC has not made it a secret that not all the businesses licensed would be able to reach the traditional level of success.
List of platforms licensed by Hong Kong SFC
More News: Hong Kong’s first licensed crypto exchange HashKey is now live
Hong Kong’s Crypto Regulation and Future Roadmap
This batch sale of the licenses forms part of a grander sequence by Hong Kong SFC to build a cogent framework for virtual asset trading platforms (VATPs). After the year 2020, ten crypto exchanges have been officially licensed in Hong Kong under AMLO, signaling the future of regulated activities.
Newly in late 2024, the SFC set to approve 11 crypto service providers by the end of the year. Although they did not meet their target, they licensed projects throughout 2025 showing resilience from the regulator. The main focus of the regulating institution is on granting licenses to crypto platforms, however, the priority remains with on-site reviews in order to identify the ones that need most attention. The focus is on the following factors:
- Safeguarding Client Assets: User funds security by platforms are implemented safely.
- Know Your Customer (KYC) Processes: The imposing of strict KYC checks that will help in the user identification and illegality of activities will be the order of the day.
- Cybersecurity: Successful implementation of standards that fully secure platforms and data from cyber threats and breaches.
Balancing innovation with investor protection remains a significant challenge for Hong Kong regulators as they navigate the evolving crypto landscape.
A Look at the Bigger Picture: Challenges and Priorities
The SFC’s primary objective is to build a virtual asset system; however, many obstacles have been encountered in the process. The delays that occurred in reaching approvals for new crypto licenses at the end of 2024 was the main reason for them to push the timeline into 2025. This has turned off many enthusiasts who find the scene in question less appealing than other financial hubs. On the other hand, not only had the number of crypto licenses granted by Singapore by the end of last year doubled that in Hong Kong, it had also shown the fierce competition in the industry.
The SFC’s 2024-2026 roadmap is undoubtedly of utmost importance and it is their prior agenda to:
- Attracting more investors to the market
- Increasing market integrity
- Security of the financial sector
- Encouraging new ideas
The SFC’s four priorities in its 2024-2026 roadmap
These are very ambitious plans, and achieving them will be possible only through the continuous evaluating and adopting of changes in the vibrant crypto environment. The crux of the matter is the balance that must be set by the regulator which provides for the interests of the investors and at the same time enables the continuous growth of the virtual asset ecosystem. This has been the most challenging part for the regulators stated the SFC executive director Eric Yip.
More News: Hong Kong’s Vision: Transforming Banking with Distributed Ledger Technology (DLT)
Limited Cryptocurrency Options
Although Hong Kong is positioning itself as a crypto hub, the number of cryptocurrencies available for trading remains limited. At the moment, only four cryptocurrencies are authorized for trading;
- Bitcoin (BTC), the most known crypto of all
- Ether (ETH), the coin that powers Ethereum
- Avalanche (AVAX), a platform that is fast and scalable
- Chainlink (LINK), a network for distributed oracles
Although some crypto enthusiasts may find it annoying that they can only choose from a few options, it is consistent with the SFC’s careful handling of digital asset entrance into the market. In real life, if a person in Hong Kong desired to purchase Solana (SOL), they would not be able to use it legally via these controlled platforms. This suggests that the Hong Kong SFC maintains strict control over the local digital asset market.
Other Players and Future Licensing
Outside the two recently licensed platforms (PantherTrade and YAX), other virtual asset trading platforms are currently under consideration and in the pipeline for potential authorization by the SFC. Some of them are the Hong Kong BGE, Whalefin Markets, Flying Hippo Technologies, and HighBlock. It will be interesting to watch the development of this area. New authorizations are likely to catalyze the transformation of the crypto trading landscape in Hong Kong.
The SFC Executive Director, Mr. Ye Zhiheng had informed that there would be more virtual asset licenses around the end of the first quarter of 2025. Assuming that his statement that “good news” will be here in a month and two neatly indicates that there are approvals forthcoming, direct to say the Hong Kong market, besides, will be improving gradually through different projects. The agency’s proactive engagement with top managers of the VATPs aims to “drive home our expected regulatory standards and expedite our licensing process.“
The grant of these licences is evidence that Hong Kong, although it is struggling to get to the top of the crypto market, has regulators who are committed to the responsible and secure development of a virtual asset ecosystem. Investor protection, AML compliance, and a cautious innovation policy are still at the forefront of government measures, therefore, the inevitable development of further projects is guaranteed.
This article first appeared at CryptoNinjas
