SFC puts small Hong Kong crypto exchanges under glare of public scrutiny as they pursue virtual asset licences
HKVAX, HKbitEX, Hong Kong BGE and Victory Fintech all tout their commitment to operating in accordance with crypto regulationsThe exchanges are just a few years old, with two owned by publicly-listed companies that reported losses last financial yearDigital currenciesMatt HaldanePublished: 7:00am, 27 Sep, 2023Why you can trust SCMP
The named entities are Hong Kong Virtual Asset Exchange (HKVAX), Hong Kong Digital Asset Exchange (HKbitEX), Hong Kong BGE and Victory Fintech, all of which say on their websites that they are committed to operating in accordance with crypto regulations. The SFC has cautioned that applying for a licence does not mean a company is already in compliance.
The JPEX debacle – with the exchange the subject of more than 2,000 complaints in relation to claims of more than HK$1.4 billion (US$183 million) in lost assets – has shaken public trust in crypto platforms.
Some exchanges have publicly announced this year that they are, or will be, pursuing licences in the city, hoping to reassure potential customers. But only four companies have officially started the process, none of which are household names like industry giant Binance.
The SFC previously did not want to disclose the names of exchanges applying under the virtual asset trading platform licensing scheme that went into effect in June, lest it give consumers a false sense of security. The regulator has said crypto traders should only buy from licensed exchanges, but there are only two in Hong Kong so far – HashKey and OSL.