In the wake of the JPEX scandal, the Securities and Futures Commission (SFC) of Hong Kong announced plans to strengthen investor education and release more information regarding virtual asset investments. As part of this initiative, the regulator revealed a list of virtual asset trading platform applicants, which initially includes four institutions.
These four applicants are all locally based in Hong Kong, distinguishing them from previously rumored candidates. This also indicates that other well-known crypto exchanges that had publicly expressed interest have not yet formally applied.
HKVAX
Hong Kong Virtual Asset Exchange (HKVAX) is slightly ahead of the other three applicants, having received in-principle approval from the SFC. According to a press release on its official website dated August 11, final regulatory approval would permit the platform to offer Type 1 (dealing in securities) and Type 7 (automated trading services) regulated activities.
Once fully licensed, HKVAX plans to provide users with three core services: over-the-counter brokerage, institutional-grade trading platforms, and custody solutions.
The exchange’s co-founder and Chief Operating Officer, Kenneth Fok, shared that the application process has already taken three years. He estimates that obtaining the full license may take at least another six months.
HKVAX’s leadership team includes CEO Raymond Ng, who previously served as Managing Director at CITIC Futures International and is currently the Vice Chairman of the Financial and Treasury Services Committee of the Hong Kong General Chamber of Commerce.
Victory Fintech Company Limited
Victory Fintech Company Limited is a subsidiary of Victory Securities, a well-established local securities firm. Executive Directors of the company include Lily Kuo, who is also the Chairman of the Hong Kong Securities Association.
Victory Securities has been active in virtual asset investments and currently holds several SFC licenses, including those for Type 1 (virtual asset trading), Type 4 (virtual asset advisory), and Type 9 (virtual asset management) activities. The company’s promotional materials even feature the tagline: “Buying stocks and buying crypto—equally simple.”
In March 2023, OSL announced a strategic partnership with Victory Securities. More recently, Victory Securities launched what it claims to be “the first compliant virtual asset trading application in Hong Kong’s financial market.” In its initial phase, cryptocurrency trading services for professional investors are provided by OSL.
HKbitEX
Founded in 2019, HKbitEX was established by several former senior executives of Hong Kong Exchanges and Clearing Limited (HKEX), including its founder Gao Han. In 2020, the platform successfully completed a Series A2 funding round, raising US$10 million. The round was co-led by Axion Global Investment Limited (a wholly-owned subsidiary of Hong Kong-listed A-Living Group) and Hanwha Asset Management.
According to its official website, HKbitEX aims to provide a compliant and regulated digital asset spot trading platform and OTC services for global professional investors. It is one of the first institutions in the Asia-Pacific region to apply for a virtual asset trading platform license from the SFC.
Hong Kong BGE Limited (HKBGE)
HKBGE is a subsidiary of HKE Holdings Limited, incorporated on April 19, 2021. It fully owns HKBGE TSP Limited, which obtained a Trust or Company Service Provider (TCSP) license under the Anti-Money Laundering Ordinance (AMLO) in September 2021. This entity provides virtual asset custody services for HKBGE’s trading platform.
HKE Holdings, the parent company of HKBGE, has a market capitalization of approximately HK$2.3 billion. The chairman and major shareholder of the company is Lian Haomin, 31, who attracted media attention in 2022 for filing a winding-up petition against China Evergrande Group. There has been speculation about his family background, though these claims remain unverified.
The CEO and Executive Director of HKBGE is Au Kin-nam, who was also a founding member of HashKey Digital Asset Group. He has served as the Chief Operating Officer of HashKey’s SFC-licensed virtual asset trading platform since 2018. According to the latest Companies Registry records, HKBGE currently has two directors: Au Kam-pui and Kee Tanna, who serve as Head of Operations and Head of Business Development, respectively. The company’s website is currently accessible only to invited professional investors.
HKBGE is in the process of applying for a virtual asset trading platform license. The company’s Chief Legal Officer,黎明俊, mentioned that the application has taken about one to two years so far and is currently in the confirmation stage. The next phase is in-principle approval, and based on the experience of already licensed companies, obtaining the full license may take four to six months after that.
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Broader Regulatory Developments
The SFC has also announced that it will publish several other lists related to virtual asset trading platforms. These include lists of licensed platforms, platforms that have ceased operation, and platforms that are deemed licensed. Additionally, the regulator will maintain a dedicated list of suspicious virtual asset trading platforms on its official website.
In related industry news, Justin Sun, a global advisor to HTX (formerly Huobi), mentioned in an interview with CoinDesk that the exchange expected to obtain a Hong Kong license within six to twelve months. As of now, no further updates have been disclosed by HTX.
On September 25, OKX Chinese tweeted that the exchange plans to submit a formal application by the end of October.
Frequently Asked Questions
What is the SFC’s role in regulating virtual asset trading platforms in Hong Kong?
The Securities and Futures Commission (SFC) is the primary regulatory body overseeing virtual asset trading platforms in Hong Kong. It issues licenses, monitors compliance, and takes enforcement action against unregulated or fraudulent operators.
How long does it typically take to obtain a virtual asset trading license in Hong Kong?
The process can take several years. For example, HKVAX has been in application for three years and expects another six months. After in-principle approval, it usually takes four to six months to receive the full license.
Who can trade on these SFC-licensed platforms?
Initially, most platforms cater to professional investors. However, some are expanding services to retail investors in compliance with evolving regulations and safeguards.
What should investors look for in a virtual asset trading platform?
Investors should prioritize platforms that are licensed by the SFC, offer transparent fee structures, have robust security measures, and provide clear custody solutions for digital assets.
How does the SFC’s suspicious platform list help investors?
This list alerts the public to platforms that may be operating without a license or engaging in dubious practices, helping investors avoid potential scams and financial loss.
Are global exchanges like OKX or HTX applying for Hong Kong licenses?
Yes, global exchanges have shown interest. OKX plans to apply by October 2023, and HTX has previously expressed intentions, though official approvals are still pending.