OKX, a prominent cryptocurrency exchange, has reached the advanced stages of the application process for a Virtual Asset Service Provider (VASP) license in Hong Kong. Executives from OKX have confirmed that they are actively in discussions with banks and are awaiting the group's submission of the license application. Technical preparations and other necessary arrangements have commenced in anticipation of securing the license.
Hong Kong adopted a pro-cryptocurrency stance in 2023, introducing a licensing framework for cryptocurrency exchanges to offer services to retail clients. Despite initial interest from over 80 cryptocurrency companies in establishing a presence in Hong Kong, only a select few, including HashKey and OSL , have managed to obtain the required licenses for launching retail cryptocurrency trading services.
HashKey, for instance, began offering retail cryptocurrency trading services to Hong Kong users on August 28, albeit with some limitations. Hong Kong's regulators currently allow only Bitcoin and Ethereum trading for retail clients, a move aimed at mitigating risks associated with newer cryptocurrencies. Moreover , there is a 30% investment cap for individuals, restricting them to invest only up to one-third of their net income.
In addition to HashKey and OSL, other major players like Huobi and Gate.io have applied for retail cryptocurrency trading services and are awaiting regulatory approval. The Hong Kong Securities and Futures Commission has imposed stringent requirements on virtual asset service providers, including mandates for insurance coverage and compensation arrangements to safeguard customer interests. Furthermore, cryptocurrency exchanges are obligated to store a significant portion of their assets, specifically 98%, in cold wallets.
