Hong Kong grants crypto license application even after deadline

Hong Kong Digital Asset Xchange Limited (HKDAEx) recently applied for a digital asset exchange license, submitting its application on August 27, despite the original deadline being May 31.

The Hong Kong Securities and Futures Commission (SFC) has approved the application, allowing HKDAEx to move forward despite the late submission.

HKDAEx is a Hong Kong-based firm and a member of the Hong Kong Financial Asset Exchange Group, focused on connecting physical and digital assets to improve liquidity and enhance the value of physical assets.

However, the SFC has the authority to return the application if it is incomplete or if there are unresolved issues, indicating that HKDAEx’s approval could still face further scrutiny.

As of June 1, operating an unlicensed virtual asset trading platform (VATP) in Hong Kong became a criminal offense under the new regulatory regime.

Some crypto firms received initial approval from the SFC but are yet to obtain full licenses. These applicants are considered "deemed-to-be-licensed" and are temporarily allowed to operate under a transitional framework.

Currently, only two platforms—OSL Digital Securities and Hash Blockchain—hold full virtual asset trading licenses in Hong Kong.

Several other exchanges, including Crypto.com, Bullish, HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixin.com, EX.IO, YAX, WhaleFin, and Matrixport HK, are still waiting to receive full operational licenses.

Hong Kong has been positioning itself as a global cryptocurrency hub, drawing investors and firms to its digital assets market through advancements in digitalisation and tokenisation.

The city aims to become a free trade hub and a testing ground for emerging financial technologies, leveraging its unique position in the global economy.

According to the 2024 Henley Crypto Adoption Index by Henley & Partners, Hong Kong ranks second worldwide in cryptocurrency adoption, following Singapore.

The city scored highly on economic factors and tax-friendliness, creating an environment that fosters significant public interest and growth in the crypto sector.