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Hong Kong’s Securities and Futures Commission (SFC) is speeding up crypto platform licensing—and it’s making waves. At the 2024 Fintech Week, Dr. Eric Yip, a top SFC official, talked about plans to tighten and fast-track licensing for virtual asset trading platforms (VATPs). This new push isn’t just about more rules; it’s about building trust and security for investors in a market that’s moving fast.
Why SFC Pushing For Regulations
As of now, fourteen platforms—including big names like Crypto.com and Matrixport—have temporary “deemed-to-be-licensed” status. Only three have full licenses, though. But the SFC plans to get the first full batch out by the end of 2024. Part of this fast-track process involves on-the-ground inspections and direct talks with VATP leaders. This hands-on strategy isn’t just for show—it’s meant to keep things transparent and compliant.
A New Panel and Tokenization Plans for 2025
Starting early next year, the SFC wants to introduce a consultative panel for VATPs. This group will include people from licensed platforms and should keep communication open between the SFC and the industry. Plus, this group’s ideas will help create a white paper on where the industry is heading.
On top of this, the SFC is working closely with the Hong Kong SAR Government and other regulators to bring a stronger, unified framework to crypto trading. This collaboration could make Hong Kong a safer and more predictable market for crypto traders.
What’s Next?
The SFC is also going big on tokenization. Through Project Ensemble, a project led by the Hong Kong Monetary Authority, they’re setting up standards for handling tokenized assets. The aim? To help Hong Kong become a leader in digital finance and keep up with the global push towards tokenization.
Earlier in 2024, Hong Kong took serious action against unlicensed crypto exchanges, even ordering shutdowns. The government had set a February deadline for exchanges to apply for a license or face closure by mid-year. Out of 22 platforms, some applied, but others backed out, likely daunted by the strict rules. This shows Hong Kong’s strict stance but also signals a future of clearer, safer rules for licensed platforms.