OKX cryptocurrency exchange is in the final stages of acquiring a virtual asset service provider license (VASP) in Hong Kong. The exchange is expecting to receive final approval for the VASP license by March 2024.
In a recent interview, Li Zhikai, the global chief commercial officer of OKX, stated that the exchange is actively engaged in discussions with banks and is currently awaiting the issuance of a license to start its business operations. OKX has already begun preparatory work, including technology integration.
Hong Kong has emerged as a pro-crypto nation, announcing a licensing regime for crypto exchanges to offer services to retail customers in 2023. While more than 80 crypto firms initially expressed interest in opening offices in the country, only a few, such as HashKey and OSL, have successfully obtained the necessary license to commence retail crypto trading services.
HashKey began offering retail crypto trading services to Hong Kong users on August 28. The regulatory body in Hong Kong has initially allowed Bitcoin (BTC) and Ether (ETH) trading for retail customers to mitigate risks associated with investing in new crypto tokens. To further protect investors, the regulations also impose a 30% cap on investments, allowing individuals to invest only up to one-third of their net income.
Apart from HashKey and OSL, other major platforms like Huobi and Gate.io have also applied for retail crypto trading services and are currently awaiting regulatory approval. An executive from Gate.io shared their regulatory experience in Hong Kong, highlighting the strict requirements imposed by the Hong Kong Securities and Futures Commission on virtual asset service providers. The commission has made it mandatory for crypto platforms to offer insurance and compensation arrangements to safeguard clients’ interests. Additionally, the exchanges are required to store 98% of their assets in cold wallets for enhanced security.
Cointelegraph approached OKX for their perspective on the regulatory experience and expectations from the Hong Kong retail market, but an immediate response was not received.
As the cryptocurrency industry continues to grow, acquiring a VASP license in Hong Kong provides an opportunity for exchanges to expand their services and cater to retail customers. With the increasing demand for cryptocurrencies, obtaining regulatory approval can help foster trust and confidence among users, ultimately driving the adoption of digital assets.