Hong Kong signals the licensing of over 8 crypto companies by the end of the year

Hong Kong is likely to license at least eight crypto companies by the end of the year, according to Forkast News.

The licenses will be issued as part of Hong Kong’s new crypto licensing regime, as the Forkast News article noted. The information was provided by Angelina Kwan, a former regulator at the Hong Kong Securities and Futures Commission (SFC) and current CEO of financial firm Stratford Finance.

New licensing regime

According to Kwan, many crypto companies are looking to establish a business in Hong Kong. With knowledge of this, the regulators are preparing a new licensing program that will come into force in June. Considering the number of requests for a license, Kwan estimates that at least eight companies will be eligible to acquire a license during the second half of the year.

Regarding the most vital aspects of securing a license, Kwan stated:

“Internal control is very important and by putting it into policies and procedures that they actually follow. Security is key and so is the wallet system. They require firms with digital assets to have their own wallet system in place. It has to be like a part of the whole process now rather than separating it, unless you have a very good system in place.”

The rules will require all crypto exchanges to allow trading of specific large-cap tokens. On the other hand, non-fungible tokens (NFTs) are considered securities and are not covered by the new licensing regulations.

Hong Kong and crypto

Hong Kong began to lean on regulations after the FTX collapse. Within a few months, the city’s regulators announced that a new set of regulations would go into effect in June 2023.

See also  Crypto influencers reportedly threatened lawyer behind FTX class action

According to statements from earlier this month, over 80 crypto companies are looking to branch out to Hong Kong, while state-owned banks in the region are also motivated to partner with crypto companies.

Examining Hong Kong’s current state within the cryptosphere, some experts recognize the benefits of the city’s strict crypto regulations.

Posted in: Hong Kong, Regulation

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