OKX is on the verge of securing a Virtual Asset Service Provider (VASP) license in Hong Kong. This milestone comes as Hong Kong embraces crypto, with a licensing framework introduced in 2023 to allow crypto exchanges to serve retail customers.
OKX’s Journey to VASP License
OKX, a prominent player in the crypto exchange sphere, has diligently navigated the regulatory landscape in Hong Kong. They have now reached the final stages of the VASP license application process.
According to an OKX executive, the exchange is actively engaged in discussions with local banks, anticipating the imminent issuance of the license. With an expected approval date by March 2024, OKX is gearing up for a new chapter in their business operations. The preparation includes essential steps like technology integration.
Hong Kong’s Pro-Crypto Stance
Notably, Hong Kong’s shift towards embracing cryptocurrencies began in 2023. This was when the government introduced a licensing regime for crypto exchanges targeting retail customers.
While initially, more than 80 crypto firms expressed interest in establishing a presence in Hong Kong, only a select few have obtained the necessary licenses to offer retail crypto trading services. Notable among these pioneers are HashKey and OSL.
HashKey: Pioneering Retail Crypto Trading
HashKey made headlines by becoming one of the first crypto platforms to offer retail crypto trading services in Hong Kong. They commenced their operations on August 28th, providing retail users access to Bitcoin and Ether trading. The local regulatory body’s cautious approach allows only established cryptocurrencies to be traded, reducing risks associated with new tokens.
Additionally, regulations impose a 30% cap on investments. This limited individual investors to allocate only one-third of their net income to crypto assets.
Other Players in the Game
While HashKey and OSL have successfully ventured into retail crypto trading, other exchanges are in line for regulatory approval. Notable contenders include Huobi and Gate.io. A Gate.io executive shared insights into Hong Kong’s regulatory landscape, highlighting the stringent requirements imposed by the Hong Kong Securities and Futures Commission.
These requirements include mandatory insurance and compensation arrangements to safeguard clients’ interests. Furthermore, crypto exchanges must securely store 98% of their assets in cold wallets, ensuring the utmost security.
OKX’s Ongoing Efforts
It’s important to note that OKX is actively working on their VASP license application, but a fixed approval date remains unconfirmed. In the dynamic world of crypto regulation, meticulous preparation and compliance with stringent requirements are essential for exchanges like OKX.
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