Hong Kong crypto platform HKVAX receives approval-in-principle from SFC

• HKVAX has moved closer to becoming only the third platform to receive a VATP licence in Hong Kong.
• This is after it obtained an approval-in-principle from the Hong Kong Securities and Futures Commission (SFC)
• The SFC website lists OSL and Hashkey as only two VATP licensed companies.

Hong Kong Virtual Asset Exchange (HKVAX) has received a notice of approval-in-principle from the Hong Kong Securities and Futures Commission (SFC).

A press release from HKVAX noted that the approval will see the platform become only the third virtual asset trading platform (VATP) to be licensed by the SFC.

“We are delighted to have received approval-in-principle from the SFC and look forward to creating a safe and trusted environment for investors in one of the world’s largest and most dynamic financial centres,” said Dr. Anthony Ng, co-founder and CEO of HKVAX.

According to HKVAX, a final approval from the regulator will allow the company to provide regulated activities identified as Type 1 (securities offerings) and Type 7 (automated trading services) to customers. HKVAX will offer three core products to users once the regulatory process is done – an OTC brokerage, an institutional-grade exchange platform, and custody solution.

HKVAX to join OSL and Hashkey as third VATP licence

 HKVAX’s approval-in-principle could see it join OSL and Hashkey as the third licensed VATP in Hong Kong. Details on the SFC website show that OSL received the first digital assets broker licence in December 2020, while Hashkey was licensed in November 2022. 

The path to approval for HKVAX comes on the back of the Hong Kong government’s push to bring into operation a new crypto framework for the virtual asset industry.

Among the changes has been the requirement that registered institutions and banks extend services to SFC-licensed crypto platforms. Firms seeking to offer virtual assets are also obligated to apply for appropriate licences before providing these services.

Sam Fok, co-founder and COO at HKVAX said they welcome the new changes meant to provide regulatory clarity for the industry in Hong Kong. He added:

“Over the last two years, we have worked very closely with the government and other stakeholders to strengthen regulations. We welcome the changes proposed recently by the SFC that open up virtual assets to a wider community while providing investors of all types with the transparency, reliability and protection they expect. The changes also signal Hong Kong’s intent to become a global virtual asset hub.”

On August 7, the SFC published a warning to VATPs that are yet to get properly licensed not to mislead users, particularly through statements published in relation to “their intention to apply for licences.” 

According to the regulator, such announcements are likely to “give the public a false sense of assurance” that the VATP is compliant with SFC regulations.