The Securities and Futures Commission (SFC) in Hong Kong has received a total of 18 applications for crypto licenses from both local and international entities over a period of two months. On February 20th, it was confirmed that Huobi HK, the Hong Kong branch of the crypto exchange Huobi, has applied for a virtual asset trading platform license with the SFC. Other notable entities that have filed for the same license include Crypto.com, OKX, Bybit, and DFX Labs. These applications require applicants to undergo rigorous due diligence checks, including a comprehensive financial audit. In order to meet these requirements, Web3 firms are having to invest up to $25 million in building their license applications. The recent clarity provided by Hong Kong regarding exchange licensing has also attracted traditional brokerages, such as Tiger Brokers, a Chinese stock brokerage, which upgraded its Type 1 SFC license to include crypto trading for professional investors and financial institutions in Hong Kong. Furthermore, the SFC has received its first application for a spot Bitcoin exchange-traded fund (ETF) from Harvest Hong Kong, one of China’s largest fund managers. As Hong Kong prepares for increased crypto adoption, it has implemented a minimum insurance requirement of 50% for licensed crypto exchanges that handle customers’ assets. OSL Exchange, for example, has partnered with Canopius, a syndicate of underwriter Lloyds of London, to provide an insurance policy covering 95% of its users’ assets.
Crypto license applications in Hong Kong experience a significant increase