The cryptocurrency landscape in Hong Kong is undergoing a pivotal transformation as the city advances its ambition to become a global digital asset hub. The Securities and Futures Commission (SFC) has taken a major step forward by identifying 11 virtual asset trading platforms (VATPs) as applicants in an advanced stage of the licensing process. This marks a critical milestone in Hong Kong’s regulatory journey, which began with the implementation of comprehensive digital asset rules in June 2023.
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The 12-month transitional period for existing crypto platforms to comply with new regulations officially ended on June 1, 2025. During this time, platforms were required to submit formal applications or risk being phased out. The SFC has now updated its official list, recognizing the following 11 platforms as "deemed licensed" applicants:
- HKbitEX
- PantherTrade
- Accumulus
- DFX Labs
- Bixin.com
- xWhale
- YAX
- Bullish
- Crypto.com
- WhaleFin
- Matrixport HK
These platforms are now operating under enhanced scrutiny and must meet strict anti-money laundering (AML) and counter-terrorist financing (CFT) requirements under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. However, the SFC has emphasized that no formal license has been issued yet — these platforms are merely treated as licensed while their applications are under review.
Six other applicants — BGE, HKVAX, VDX, bitV, HKX, and bitcoinworld — remain outside this category and may face operational restrictions if they fail to meet compliance standards.
Regulatory Clarity Amid Global Uncertainty
Hong Kong’s push for a regulated crypto ecosystem comes at a time when many global players have chosen to step back. Major exchanges such as OKX and Bybit withdrew their license applications, while industry giants like Binance, Coinbase, and Kraken did not apply at all. This reflects the challenges posed by Hong Kong’s rigorous compliance framework, which demands transparency, capital adequacy, and investor protection measures that some international firms find difficult to meet.
Despite this, Hong Kong remains committed to building a secure and trustworthy environment for digital assets. The city aims to strike a balance between innovation and regulation — protecting investors while attracting institutional capital and fostering fintech growth.
Hong Kong’s Strategic Bid to Become a Crypto Financial Center
In late 2022, Hong Kong officials shifted focus toward establishing the city as a virtual asset hub, partly in response to declining confidence among multinational corporations and expatriates. By positioning itself as a regulated gateway for digital finance in Asia, Hong Kong hopes to reassert its status as a leading international financial center.
Key initiatives include:
- Expanding the list of approved crypto trading platforms
- Launching spot Bitcoin and Ethereum exchange-traded funds (ETFs)
- Developing frameworks for stablecoins and tokenized bonds
- Introducing clear taxation guidelines for digital assets
These efforts place Hong Kong in direct competition with other emerging crypto hubs like Dubai and Singapore. While the city’s strict regulatory stance enhances investor protection, it also raises operational costs and compliance burdens — factors that could influence long-term competitiveness.
Currently, only two platforms — HashKey Exchange and OSL Group — hold full SFC licenses. The addition of 11 more platforms in the deemed-licensed category signals progress, but final approvals will depend on ongoing compliance assessments.
Bridging the Gap: Access for Mainland Investors?
One of the biggest challenges facing Hong Kong’s crypto ambitions is access for mainland Chinese investors. Despite Hong Kong’s role as a traditional financial gateway to China, the mainland government maintains a ban on cryptocurrency trading. This creates a significant barrier, as Chinese investors represent a vast potential market for digital assets and crypto ETFs.
Yet demand persists. Many mainland citizens continue to seek alternative investments amid property market downturns or attempt to use cryptocurrencies to bypass capital controls. Since early 2023, Bitcoin’s price has surged over 300%, further fueling interest in digital assets despite regulatory risks.
However, enforcement remains complex. Users often employ virtual private networks (VPNs) to access overseas platforms or engage in peer-to-peer (P2P) transactions, operating in legal gray areas. These behaviors underscore the difficulty regulators face in monitoring cross-border crypto activity.
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Learning from Global Crypto Failures
Hong Kong’s regulatory caution is informed by high-profile failures in the global crypto industry. The collapse of FTX marked one of the largest frauds in U.S. history, while Binance admitted to violating anti-money laundering laws in November 2023, resulting in a $4.3 billion penalty. Closer to home, the alleged scam involving Japan-based JPEX sent shockwaves through Hong Kong’s financial community, highlighting the risks of unregulated platforms.
These incidents have reinforced the need for robust oversight. The SFC continues to warn investors about the risks of trading on platforms that are not fully licensed — including both local deemed-licensed applicants and unregulated overseas exchanges.
What Are Deemed-Licensed Platforms?
A "deemed licensed" status means a platform can continue operating while its application is reviewed, provided it meets certain conditions. However, this does not guarantee eventual licensing. If an applicant fails to satisfy regulatory requirements, it may be forced to cease operations in Hong Kong.
Frequently Asked Questions (FAQ)
Q: What does 'deemed licensed' mean?
A: It means a crypto platform is allowed to operate temporarily while its full license application is under review by the SFC. It is not the same as being fully licensed.
Q: Can I safely invest on a deemed-licensed platform?
A: While these platforms are under regulatory supervision, they are not yet fully approved. Investors should exercise caution and assess each platform’s compliance history and security measures.
Q: Why didn’t major exchanges like Binance apply for a license?
A: Many global platforms find Hong Kong’s regulatory requirements — including capital reserves, audit standards, and customer protection rules — too stringent or incompatible with their current operations.
Q: Are Hong Kong crypto ETFs available to international investors?
A: Yes, spot Bitcoin and Ethereum ETFs listed in Hong Kong are accessible to qualified investors globally, subject to local regulations.
Q: How does Hong Kong’s crypto regulation compare to Singapore’s?
A: Both jurisdictions prioritize investor protection, but Hong Kong places stronger emphasis on integration with traditional finance and institutional adoption, while Singapore has been more open to retail participation.
Q: Will mainland Chinese investors be able to access Hong Kong crypto services?
A: Not directly due to China’s domestic ban on crypto trading. However, demand continues through indirect channels, though these carry legal and financial risks.
As Hong Kong solidifies its position in the global digital asset race, the next phase will focus on execution — turning regulatory frameworks into real-world innovation. With investor protection at the core and a clear roadmap for growth, the city is laying the foundation for a sustainable crypto ecosystem.
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The success of this vision will depend not only on strict compliance but also on building trust, enabling access, and delivering value to both institutional and retail participants in the years ahead.