The Hong Kong Virtual Asset Exchange (HKVAX) has officially become the third cryptocurrency exchange licensed to serve retail customers in Hong Kong, as part of the region’s evolving regulatory framework for virtual asset trading.
HKVAX Secures Multiple Licenses
HKVAX received Type 1 (dealing in securities) and Type 7 (providing automated trading services) licenses from the Securities and Futures Commission (SFC). It also obtained an Anti-Money Laundering and Counter-Terrorist Financing license, allowing it to operate a comprehensive virtual asset trading platform.
This makes HKVAX the first exchange to be licensed under Hong Kong’s new virtual asset licensing regime, introduced earlier in 2023. While cryptocurrency exchanges OSL and HashKey received their licenses in 2020 and 2022, respectively, HKVAX stands out as the first to gain approval under this updated regulatory system.
Core Services and Future Plans
HKVAX offers a range of services, including over-the-counter trading, a secure trading platform, and insured custody solutions. It also focuses on security token offerings (STO) and real-world asset (RWA) tokenization. HKVAX’s co-founder and CEO, Anthony Ng, highlighted the company’s vision for the future: “We’re part of a financial landscape revolution, aiming to establish Hong Kong as the STO and RWA center for Asia and beyond.”
Although the company’s trading platform is still undergoing final preparations, the licensing milestone marks a significant step in its goal of transforming Hong Kong into a major hub for digital assets.
Regulatory Landscape and Future Licensing Decisions
HKVAX is not alone in its pursuit of becoming a licensed exchange. Sixteen more companies are awaiting decisions on their virtual asset trading platform (VATP) applications, with 11 of them already operating under “deemed to be licensed” status, though the SFC has cautioned users against trading on these platforms.
Cryptocurrency trading for retail investors officially began in Hong Kong in August 2023, but regulations are progressing slowly. Retail traders currently have access to only four cryptocurrencies. Despite this, Hong Kong has taken steps toward becoming a global financial technology leader, including preparing stablecoin legislation and participating in projects like Project mBridge, an initiative to explore cross-border digital currency payments.
Hong Kong’s Global Financial Aspirations
While some have criticized the slow pace of regulatory progress, Hong Kong continues to position itself as a key player in the crypto world. As it builds its legal framework and infrastructure, the region is attracting attention from financial institutions globally, reinforcing its ambition to become a leader in digital assets and financial technology.
