OKX, a prominent cryptocurrency exchange, is now in the final stages of preparation before submitting its application for a Virtual Asset Service Provider (VASP) license in Hong Kong. This significant move comes as Hong Kong regulators have cautiously approved only a select number of crypto exchanges, permitting them to offer retail cryptocurrency trading services within the region.
In an interview with an OKX executive, it was revealed that the exchange is actively engaged in a constructive dialogue with banking institutions and is currently awaiting the formal submission of its VASP license application. As part of their meticulous preparations, OKX has commenced the necessary technical integration processes.
Hong Kong’s progressive stance on cryptocurrencies materialized in 2023 when the nation introduced a licensing framework for crypto exchanges, allowing them to cater to retail customers. Despite an initial surge of interest from more than 80 cryptocurrency firms looking to establish a presence in Hong Kong, only a handful have successfully secured the requisite licenses to commence retail crypto trading services.
Among these pioneers is HashKey, which initiated its retail crypto trading offerings for Hong Kong users on August 28. The regulatory body overseeing the sector has introduced a conservative approach, initially permitting only Bitcoin (BTC) and Ether (ETH) trading for retail customers, aiming to mitigate the risks associated with investing in newer crypto tokens. Additionally, the regulations have imposed a 30% cap on investors, limiting them to allocating just one-third of their net income to cryptocurrency investments.
Aside from HashKey and OSL, Huobi and Gate.io have also expressed their intentions to provide retail crypto trading services and are currently awaiting regulatory approval. A representative from Gate.io recently shared insights into the regulatory landscape in Hong Kong, highlighting that the Hong Kong Securities and Futures Commission imposes stringent requirements on virtual asset service providers. These requirements include mandatory provisions for insurance and compensation arrangements aimed at safeguarding clients’ interests. Furthermore, crypto exchanges are obligated to secure 98% of their assets in cold wallet storage. Regarding OKX’s application status, the exchange informed Coinography that they are diligently preparing for the submission, without specifying a fixed date as mentioned in the previous interview. This latest development underscores the evolving regulatory landscape in Hong Kong and the cryptocurrency industry’s growing adherence to compliance and transparency standards.
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