OKXOKX, a prominent cryptocurrency exchange, is edging closer to submitting its application for a Virtual Asset Service Provider (VASP) license in Hong Kong, marking a significant milestone in its journey toward regulatory compliance.
In an interview, Li Zhikai, the Global Chief Commercial Officer of OKX, revealed that they are actively engaged in discussions with banks and are eagerly awaiting the issuance of their license to commence operations in Hong Kong. In preparation for this pivotal moment, OKX has initiated essential groundwork, including technology integration.
Hong Kong embraced a pro-crypto stance in 2023, unveiling a licensing framework that permits cryptocurrency exchanges to extend their services to retail customers. This regulatory shift elicited interest from more than 80 cryptocurrency firms keen on establishing a presence in the region. However, only a select few, including HashKey and OSL, have successfully obtained the necessary licenses to commence retail cryptocurrency trading services.
HashKey, for instance, recently commenced offering retail crypto trading services to users in Hong Kong, starting on August 28th. The regulatory framework in Hong Kong presently restricts retail customers to trading Bitcoin (BTC) and Ether (ETH), a measure aimed at mitigating risks associated with investing in new cryptocurrencies. Additionally, the regulations impose a 30% cap on investors, limiting them to invest no more than one-third of their net income in cryptocurrencies.
OKX in Hong Kong
In addition to HashKey and OSL, other industry giants like Huobi and Gate.io have submitted applications for retail crypto trading services and are currently awaiting regulatory approval. It is worth noting that the Hong Kong Securities and Futures Commission (SFC) has imposed stringent requirements on virtual asset service providers compared to some other jurisdictions.
Notably, the regulator mandates that crypto platforms offer insurance or compensation arrangements to safeguard clients’ interests. Furthermore, these exchanges are obligated to store 98% of their assets in cold wallet storage, enhancing security measures.
The imminent acquisition of a VASP license by OKX reflects the exchange’s commitment to regulatory compliance and aligning its operations with the evolving crypto landscape in Hong Kong. As the cryptocurrency industry continues to mature, regulatory frameworks like the one in Hong Kong play a pivotal role in instilling confidence among investors and fostering responsible growth within the sector.
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