Crypto Exchange OKX Nears the Finish Line in Pursuit of Hong Kong’s VASP License

OKX, the cryptocurrency exchange, is making significant strides towards securing a coveted Virtual Asset Service Provider (VASP) license in Hong Kong, with expectations of final approval by March 2024.

In a recent interview, Li Zhikai, OKX’s Global Chief Commercial Officer, disclosed the exchange’s active engagement with local banks as they await their license issuance, signaling their readiness to commence operations. OKX has already initiated preparatory work, including technology integration.

Hong Kong solidified its pro-crypto stance in 2023 by introducing a licensing framework for cryptocurrency exchanges targeting retail customers. Despite initial enthusiasm from over 80 cryptocurrency firms interested in establishing a presence in the region, only a select few, such as HashKey and OSL, have successfully secured the required licenses to commence retail crypto trading services.

HashKey, for instance, commenced offering retail crypto trading services to Hong Kong users on August 28th. Notably, the local regulatory body has restricted retail trading to Bitcoin and Ethereum to mitigate risks associated with newer crypto tokens. Additionally, these regulations impose a 30% cap on investor allocations, limiting them to invest only one-third of their net income.

In addition to HashKey and OSL, other major players like Huobi and Gate.io have also submitted applications for retail crypto trading services, pending regulatory approval. An executive from Gate.io previously highlighted the stringent requirements set forth by the Hong Kong Securities and Futures Commission, noting the commission’s emphasis on protective measures for clients. These measures include compulsory insurance and compensation arrangements, designed to safeguard investor interests. Furthermore, crypto exchanges are mandated to store 98% of their assets in cold wallets.

CryptoGrafos attempted to contact OKX for insights into their regulatory experiences and expectations within the Hong Kong retail market, but as of now, no immediate response has been received.

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