Hong Kong is accelerating its push to become a global hub for virtual asset innovation, with the Securities and Futures Commission (SFC) recently granting formal licenses to four additional virtual asset trading platforms (VATPs). This marks a significant step forward in the city’s efforts to build a robust, compliant, and investor-protected digital asset ecosystem.
On December 18, the SFC issued Virtual Asset Service Provider (VASP) licenses to four previously "deemed-licensed" platform applicants under its newly implemented rapid licensing process. These platforms — Cloud Account Greater Bay Area Technology (Hong Kong) Limited, DFX Labs Company Limited, Hong Kong Digital Asset Exchange Group Limited, and Thousand Whales Technology (BVI) Limited — now join HashKey Exchange and OSL as officially licensed operators in Hong Kong.
With this update, the total number of licensed VATPs in Hong Kong has risen to seven, signaling growing regulatory momentum and increased confidence in the region’s Web3 ambitions.
The Rapid Licensing Process: A Game-Changer for Compliance
The SFC’s rapid licensing process is designed to streamline approvals for platforms that were already operating before the new regulatory regime took effect on June 1, 2023. These platforms were initially classified as “deemed-licensed” if they met transitional requirements and began their formal application within the one-year grace period.
👉 Discover how fast-track licensing is reshaping Hong Kong’s crypto landscape.
Terence Pu, Managing Director at HashKey Exchange — one of the first two fully licensed platforms — noted:
“We’ve seen unprecedented responsiveness from regulators. Compared to traditional finance sectors like securities or asset management, the approval speed in the crypto space is remarkably fast.”
This shift reflects a broader strategy by the SFC to balance investor protection with industry growth, ensuring that compliant platforms can operate efficiently while maintaining high standards of security, transparency, and risk management.
Strengthening Regulatory Clarity and Industry Confidence
In a statement, Eugene Yip, Executive Director of Intermediaries Supervision at the SFC, emphasized the regulator’s proactive engagement with platform executives and ultimate controllers:
“We are actively communicating with senior management to clarify regulatory expectations and accelerate the licensing journey. Our goal is to strike a balance between safeguarding investors and fostering sustainable development in Hong Kong’s virtual asset ecosystem.”
This hands-on approach includes risk-based on-site inspections, direct dialogue with applicants, and structured feedback loops to address compliance gaps. Platforms that fail to meet the required standards will not be granted licenses, ensuring only serious, well-resourced players enter the market.
As of June 1, 2024, a total of 11 platforms were deemed licensed during the transition period. However, only six remained in active application status by the deadline: BGE, HKVAX, VDX, bitV, HKX, and bitcoinworld. The rest either withdrew or failed to meet submission requirements.
Now, with four more approvals granted, the SFC continues processing the remaining applications using the same expedited framework, aiming for further announcements before year-end.
Expanding Services Beyond Trading: STOs and Real-World Asset Tokenization
One notable trend among licensed platforms is the expansion into advanced financial services. For instance, HKVAX — which became the third officially licensed VATP in October 2024 — has announced plans to offer security token offerings (STOs) and real-world asset tokenization (RWA) services alongside traditional trading and custody solutions.
This diversification underscores Hong Kong’s ambition to move beyond basic crypto trading and position itself as a leader in next-generation financial infrastructure. By enabling tokenized equities, bonds, real estate, and commodities, the city aims to attract institutional capital and bridge traditional finance with decentralized technologies.
Joseph Chan, Acting Secretary for Financial Services and the Treasury, confirmed that the government is exploring further enhancements to the regulatory framework:
“We’re planning to establish an advisory group early next year to support licensed platforms. Additionally, we intend to propose a licensing regime for crypto custodial services — a critical step toward building comprehensive oversight.”
Market Momentum Fuels Regulatory Progress
The timing of these developments aligns with a surge in global crypto adoption. Since the U.S. presidential election in late 2024, pro-crypto policy signals from Washington have driven Bitcoin past $100,000, marking a staggering 150% annual gain. Institutional demand has soared, led by companies like MicroStrategy significantly increasing their BTC holdings.
This macro tailwind is encouraging jurisdictions worldwide — including Hong Kong — to refine their regulatory approaches to remain competitive. As Terence Pu observed:
“Global compliance momentum is accelerating. We’re moving away from an era dominated by a few players setting the rules. Over the next 3–5 years, more countries will shape their own frameworks, and Hong Kong must seize this window.”
HashKey Exchange recently reported over HK$10 billion in accumulated assets under management — a clear sign of growing trust in regulated platforms.
👉 See how institutional adoption is transforming digital asset markets.
FAQs: Understanding Hong Kong’s Virtual Asset Licensing Framework
Q: What does “deemed-licensed” mean?
A: Platforms classified as “deemed-licensed” were allowed to continue operations during the transition period if they submitted a full license application by May 31, 2024. However, they are not yet formally approved by the SFC.
Q: How many virtual asset platforms are currently licensed in Hong Kong?
A: As of December 2024, seven platforms have received full VASP licenses from the SFC.
Q: Can licensed platforms serve retail investors?
A: Yes — only licensed platforms such as HashKey Exchange and OSL are authorized to offer retail trading services for major cryptocurrencies like Bitcoin and Ethereum.
Q: What happens if a platform fails to get licensed?
A: Unlicensed platforms must cease all operations targeting Hong Kong users. The SFC maintains a public warning list to inform investors about non-compliant entities.
Q: Are there plans for new types of crypto licenses?
A: Yes — the government plans to introduce a dedicated licensing framework for crypto custody services in 2025 to enhance investor protection.
Q: How does Hong Kong compare globally in crypto regulation?
A: Hong Kong is emerging as one of Asia’s most progressive jurisdictions, combining strict compliance standards with innovation-friendly policies — positioning it as a potential Web3 gateway between East and West.
Looking Ahead: Building a Sustainable Web3 Ecosystem
While Hong Kong has made notable progress, stakeholders agree there’s more work ahead. Industry leaders like Pu stress the importance of collaboration:
“We welcome new entrants not as competitors but as partners in building a diverse and resilient ecosystem. Together, we can leverage Hong Kong’s status as a global financial center and its deep talent pool to drive differentiated growth in virtual assets.”
With faster approvals, expanding service offerings, and strong market momentum, Hong Kong is well-positioned to become a leading node in the global Web3 network — provided it maintains regulatory clarity, technological agility, and international alignment.
👉 Explore how Hong Kong is shaping the future of compliant crypto innovation.
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