June 4, 2024
Hong Kong Crypto License Costs Surprisingly Low
Latest Cryptocurrency News

Hong Kong Crypto License Costs Surprisingly Low

The cost of obtaining a crypto exchange license in Hong Kong has decreased significantly, contrasting with the exorbitant $25 million required a year ago. Livio Wang, Chief Operating Officer of HashKey Group, disclosed in an interview with the Financial Times that the expense for this license now amounts to “several million” in USD, though he clarified that they are “not necessarily tens of millions of dollars, but certainly tens of millions of Hong Kong dollars.”

“For HashKey, which is already in operation, our investment in the entire exchange sector is indeed tens of millions of dollars, but it is not expected to be so much for a platform that is still in the licensing stage.”

Regulatory Developments and Market Impact

Since June 1, Hong Kong regulators have intensified efforts to eliminate unlicensed crypto exchanges, with potential criminal charges for noncompliance. Presently, over 11 firms hold the “deemed to be licensed” status, a significant increase from just two fully licensed exchanges—HashKey and OSL—last year.

Wang revealed that HashKey Exchange, since its inception, oversees $500 million in user assets and has facilitated $440 billion in cumulative trades. He noted a substantial increase in customer activation, with a 267% rise in activated customers compared to the previous week.

Market Expansion and Regulatory Challenges

In April, HashKey expanded its operations by establishing a global exchange in Bermuda, following Coinbase’s model. Unlike its Hong Kong-based counterpart, HashKey Global excludes Hong Kong, China, the United States, and several other regions from its services.

The implementation of Hong Kong’s exchange licensing regime faced setbacks in the wake of JPEX, an unlicensed crypto exchange, which defrauded investors of $166 million before collapsing in September 2023. This incident heightened residents’ skepticism toward crypto investments and underscored the importance of stringent regulatory oversight.

The evolving landscape of crypto regulation in Hong Kong reflects both challenges and opportunities for market participants. While the cost of a license has decreased, regulatory scrutiny has intensified, necessitating compliance and strategic decisions for crypto businesses operating in the region.

Image by OpenClipart-Vectors from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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