HashKey receives Hong Kong’s first crypto exchange license.

HashKey receives Hong Kong's first crypto exchange license.

In Hong Kong’s brand-new cryptocurrency regulatory framework, the first licenses have begun to be distributed. HashKey Exchange and OSL were both awarded licenses, which enables them to legally assist the trading of cryptocurrencies for regular retail investors in the city. 

The local government in Hong Kong has set its sights on making the city a preeminent center of activity for the digital asset industry on a worldwide scale.

HashKey Exchange stated that because of their improved licenses, they are now able to broaden the scope of their services to include retail clients in addition to the professional investors that they now serve. 

On the other hand, it is essential for them to comply with the guidelines that were established in June for Virtual Asset Trading Platform Operators and that went into effect at that time. To guarantee that they are in compliance with the regulations, such platforms are required to follow the norms and requirements that are outlined in these guidelines.

In order to strengthen its position as a leading center for digital finance, Hong Kong initiated the implementation of a mandatory regulatory framework for cryptocurrencies this summer. This action garnered a substantial amount of attention and stands in stark contrast to the more stringent stance that the United States has taken towards digital assets. 

Nevertheless, in spite of these attempts, Hong Kong has not yet been successful in luring significant investments from the bitcoin business, which experienced a decline in market activity the previous year.

As a direct result of the implementation of this new framework, one of the cryptocurrency exchanges, HashKey, made public its collaboration with Standard Chartered Plc to provide customers with the ability to deposit and withdraw fiat currency. In addition to that, the business launched its over-the-counter trading facility for virtual assets.

HashKey and OSL were the only two cryptocurrency exchanges in Hong Kong to have permission to operate under the city’s voluntary licensing program before the introduction of mandatory restrictions.

“We have a significant advantage as pioneers in this space,” stated Hugh Madden, the CEO of OSL, in an official announcement about the company. Following the announcement, retail investors are now able to participate in trading on their platform, beginning with well-known cryptocurrencies such as Bitcoin and Ether.

HashKey Group is a multi-faceted corporation that operates in a variety of industries, including trading, asset management, and venture capital investing. 

According to a report that was published by Bloomberg News in the month of May, the company was reportedly in the first stages of discussions to raise funding in the range of $100 million to $200 million, with an anticipated valuation of more than $1 billion.

The new regulations that have been implemented in Hong Kong allow cryptocurrency exchanges to provide trading services to both individuals and institutions. 

However, in order to do so, the exchanges must first get licenses that are designed to prevent the risky activities that were exposed during the market crash of 2022 and the failure of the FTX platform.

Retail investors, on the other hand, are restricted to trading larger, more established cryptocurrencies such as Bitcoin and Ether. These cryptocurrencies are required to be listed on at least two recognized and investable indexes in order to be available for trading. 

Because these new laws include requirements for risk assessments, insurance coverage, and secure asset custody, there is a possibility that the operational costs of the exchanges will rise as a result.

Reception with Caution

The value of cryptocurrencies has dropped by an enormous $1.8 trillion since their all-time high in 2021, and as a result, crypto businesses are proceeding with extreme caution when it comes to fresh investments. This is because the industry has been hit hard by the loss of thousands of jobs.

According to the findings of a poll that was carried out by Bloomberg News in the month of May, 15 of the most significant digital asset businesses, including big exchanges that are accountable for a sizable share of crypto trading volumes, have abstained from declaring their precise investment intentions for Hong Kong.

Nevertheless, in spite of the conservative stance, the Securities and Futures Commission (SFC) has been inundated with questions, and a number of cryptocurrency companies, including Huobi, OKX, and Amber Group, have stated that they intend to submit licensing applications in Hong Kong. Not only does the city provide access to the regional market, but it also acts as a possible entrance to the wealth of China. This is especially true in the event that Beijing decides to relax its prohibition on cryptocurrency trading on the mainland.

As a result of the increased regulatory clarity in Asia, the digital asset industry is rapidly turning its attention to the area in search of expansion prospects. 

Hong Kong, Japan, Singapore, and South Korea are among the jurisdictions actively competing with one another to attract cryptocurrency-related enterprises.

These companies are operating in a highly competitive environment, where they must compete with other players such as Dubai and the European Union. In contrast, the United States is struggling with uncertainty in the cryptocurrency area as a result of inconsistent judicial rulings, disagreements between regulatory organizations, and differences of opinion regarding prospective laws.


About Ylleza Jashari

Senior student pursuing a degree in Security Studies at Rochester Institute of Technology. In my role as a Content Writer at Walletor, my primary objective is to develop informative content that effectively educates all Walletor users on the most up-to-date insights pertaining to financial transactions, digital wallets, and the broader cryptocurrency industry.

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