Hong Kong aims to license more crypto exchanges by year-end.

SFC CEO Julia Leung mentioned the regulator expects to "make progress" on granting licenses to 11 Virtual Asset Trading Platforms (VATPs) currently under review, as reported by HK01 on Oct. 6.

Leung noted that these licenses would be issued in "batches" to enhance compliance among crypto exchanges. There are 16 companies awaiting decisions on their VATP applications, with 11 already operating under "deemed to be licensed" status, although the SFC discourages trading with them.

She further explained that the first round of on-site inspections of crypto firms had been completed and that VATPs meeting the licensing requirements could expect approval soon. Her statements coincided with the release of the SFC’s 2024–2026 roadmap, which includes plans to strengthen regulations for crypto platforms, advance Real World Asset (RWA) tokenization, and further explore blockchain technologies. 

Currently, retail crypto investors in Hong Kong can only trade four cryptocurrencies, and the city has faced criticism for the slow development of its crypto regulations, despite its aspirations to become a global hub for crypto and fintech.

Leung expects the regulatory framework for crypto assets to be finalized by the end of next year. This update follows the recent approval of HKVAX as the third licensed crypto exchange in Hong Kong, after OSL and HashKey obtained licenses in 2020 and 2023, respectively.

Hong Kong's focus on licensing and regulation intensified after a $165 million scandal involving JPEX, a now-defunct Dubai-based crypto exchange, in 2023. Over 2,500 Hong Kong residents claimed they were defrauded, leading to stricter crypto regulations and enforcement measures. The SFC also formed a task force with local police to address illicit activities within unlicensed crypto exchanges and updated its policies on crypto sales and compliance requirements.