In a firm decision, Hong Kong’s financial regulator has declared that it will stop accepting new applications for cryptocurrency exchanges. This rule, which takes effect from February 29, 2024, requires all trading platforms that are not in compliance to stop their local business activities by May 31, 2024.
The Securities and Futures Commission (SFC) of Hong Kong has made it clear that they are taking a strong position on regulating virtual asset trading platforms. In a recent statement, the SFC stated that any crypto exchanges in Hong Kong that have not started the licensing process must stop their business within the specified timeframe.
The SFC is stressing how important it is for investors to be ready. They’re telling people who use virtual asset trading platforms to switch to licensed ones or ones that have applied for a license. The SFC previously gave licenses to two crypto trading companies: OSL Digital Securities on December 15, 2020, and HashKey Exchange on November 9, 2022.
Hong Kong’s Crypto ETF Surge
The announcement came just as the rise of Hong Kong’s biggest bitcoin futures ETF signaled a notable increase in assets under management. The fund had grown five times over the last 5 months, topping $100 million as investors flocked to buy into bitcoin’s price rally.
In the latter half of 2022, Hong Kong had its first three cryptocurrency futures ETFs approved, which marked its entry into the crypto trading market. In February 2024, CSOP Asset Management, the firm behind CSOP Bitcoin Futures ETF, reported that demand had risen significantly.
According to Alessandro Zhu, Deputy Head at CSOP Asset Management, who works in the Fixed Income Department, US authorities linked the increased activity to spot bitcoin ETFs this year. According to him, one major reason why investors believe that prices will go up is the limited supply of tokens.
Additionally, Zhu highlighted how Bitcoin has performed remarkably well this year as it has outperformed Hong Kong stocks and attracted investments from offshore financial institutions in China. This regulatory shift marks a pivotal moment for Hong Kong’s cryptocurrency market, which aligns with global trends in creating a more structured and secure trading environment.
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