Hong Kong gives conditional licenses to four crypto exchanges

The Hong Kong Securities and Futures Commission has granted conditional licenses to four virtual asset trading platforms. 

The platforms — Accumulus GBA Technology, DFX Labs, Hong Kong Digital Asset EX, and Thousand Whales Technology — must meet specific regulatory conditions before fully operating, according to the SFC.

The licenses follow the SFC’s risk-based inspections introduced in June. These inspections are designed to evaluate compliance with Hong Kong’s virtual asset regulations, aiming to protect investors while fostering growth in the crypto sector.

To proceed, the licensed exchanges must complete third-party vulnerability assessments and penetration tests. These tests identify and address potential security weaknesses, ensuring the platforms are capable of securely handling digital asset trading.

The SFC will oversee the process and assess whether the platforms have resolved issues identified during inspections.

SFC’s inspections and expecations

According to Dr. Eric Yip, the SFC’s Executive Director of Intermediaries, the regulator has worked closely with the management of these platforms to clarify expectations and speed up the licensing process. 

This proactive engagement will continue into the second phase of assessments, during which external assessors will evaluate the platforms under SFC supervision. Upon successful completion of this phase and satisfaction of all conditions, the exchanges will be able to expand their business operations.

The SFC has also issued a circular outlining the roadmap for the licensing process. This guidance aims to streamline the compliance journey for virtual asset trading platforms while reinforcing regulatory standards.

For those unfamiliar with crypto regulation, licenses like these ensure exchanges operate legally and securely. Licensed platforms must implement measures to safeguard user funds, prevent fraud, and deter market manipulation.

Source - https://crypto.news/hong-kong-gives-conditional-licenses-to-four-crypto-exchanges/