Julia Leung, CEO of the Hong Kong Securities and Futures Commission (SFC), announced plans to advance crypto regulation by year-end. 

The agency will issue licenses in batches to Virtual Asset Trading Platforms (VATPs) to improve compliance and create a more regulated environment for crypto exchanges in Hong Kong.

SFC Confirms On-Site Reviews Completed for 11 Virtual Asset Trading Platforms

In an interview with local outlet Hong Kong 01 on October 6, CEO Julia Leung highlighted that the SFC granted its third license to the Hong Kong Virtual Asset Exchange (HKVAX), joining OSL Exchange and HashKey Exchange as the only licensed crypto platforms in the region.

Leung disclosed that the SFC has also initiated a first phase of on-site reviews for 11 additional crypto platforms seeking a license, noting that these virtual asset providers have been instructed to address any deficiencies identified during the reviews.

The SFC is aiming for new progress before the end of the year, with plans to issue licenses in batches. Applicants who fail to meet the requirements will lose their licensing qualifications, while those who comply will receive conditional licenses.

Notably, the financial watchdog celebrates its 35th anniversary this year. Leung explained in the interview that the agency would support the tokenization of traditional products and explore the use of regional blockchain and Web 3 technologies to foster a fair market.

She indicated that the entire regulatory framework is expected to be completed by next year.

However, there are looming concerns regarding the slow pace of crypto regulation in Hong Kong, which claims to be a global hub for crypto despite having only three licensed exchanges – HKVAX, OSL Exchange, and HashKey Exchange.

The stringent approval process has faced backlash, with critics arguing that it could hinder Hong Kong’s aspirations to become a leading crypto and Web3 hub. Already, crypto exchanges with an established global presence, such as OKX and Bybit, withdrew their applications in May.

A report from local media, South China Morning Post, suggested that these withdrawals may have stemmed from SFC requirements that barred mainland Chinese residents from accessing their services.

However, with Leung’s recent comments signaling progress for 11 additional crypto exchanges, there is potential for advancements in Hong Kong’s crypto space.