Hong Kong regulators have only approved a handful of crypto exchanges to date that are permitted to offer crypto retail trading services.
OKX cryptocurrency exchange has entered the final stage before acquiring a virtual asset service provider license (VASP) in Hong Kong. The crypto exchange expects the final approval for a VASP license by March 2024.
In an interview, Li Zhikai, the global chief commercial officer of OKX, said that it is actively engaged in a dialogue with the banks and is currently waiting for the group to be issued a license and start a business. The crypto exchange has started the preparatory work, such as technology docking.
Hong Kong became a pro-crypto nation in 2023 and announced a licensing regime for crypto exchanges to offer their services to retail customers. While more than 80 crypto firms initially showed interest in opening an office in the country, only a couple of crypto platforms, such as HashKey and OSL, gained the necessary license to start retail crypto trading services.
HashKey started offering retail crypto trading services to Hong Kong users on Aug. 28. The regulatory body in the country has opened only Bitcoin (BTC) and Ether (ETH) trading for retail customers to cut back on the risk involved with investing in new crypto tokens. The regulations also put a 30% cap on investors that only allows them to invest one-third of their net income.
Apart from HashKey and OSL, Huobi and Gate.io have also applied for retail crypto trading services and are waiting for the regulatory nod. Previously, a Gate.io executive shared the regulatory experience in Hong Kong and told Cointelegraph that compared with other regulators, the Hong Kong Securities and Futures Commission has stricter requirements for virtual asset service providers. The regulator has made it compulsory for crypto platforms to offer insurance and compensation arrangement requirements to help protect clients. Apart from that, the crypto exchanges must hold 98% of assets in cold wallet storage.
Cointelegraph reached out to OKX for its views on the regulatory experience and expectations from the Hong Kong retail market but didn’t get an immediate response.
Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.