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Hong Kong is likely to license at least eight crypto companies by the end of the year, according to Forkast News.
The licenses will be issued as a part of Hong Kong’s new crypto licensing regime, as the Forkast News article noted. The information was stated by Angelina Kwan, a former regulator at the Hong Kong Securities and Futures Commission (SFC) and the current CEO of financial services firm Stratford Finance.
New licensing regime
According to Kwan, many crypto companies are looking to establish a business in Hong Kong. Knowing this, the regulators draw up a new licensing program that will come into force in June. Considering the number of demands for a license, Kwan estimates that at least eight companies will be eligible to acquire a license during the second half of the year.
Regarding the most vital aspects of securing a license, Kwan stated:
“Internal controls are very important and by putting it in policies and procedures that they actually follow. Security is key, and so is the walleting system. They’re requiring digital asset firms to have their own walleting system in place. That has to be as a part of the whole process now instead of separating it, unless you have a really good system in place.”
The rules will require all crypto exchanges that allow for the trade of specific large-capitalization tokens. On the other hand, non-fungible tokens (NFTs) are considered securities and are not included within the scope of the new licensing regulations.
Hong Kong and crypto
Hong Kong started to lean on regulations after the FTX collapse. Within a few months, the city’s regulators announced that a new set of regulations would come into effect in June 2023.
According to statements from earlier this month, over 80 crypto businesses are looking to branch out to Hong Kong, while state-owned banks located in the region are also motivated to cooperate with crypto businesses.
Examining Hong Kong’s current stand within the crypto sphere, some experts acknowledge the benefits of the city’s strict crypto regulations.