cryptocurrency exchange cooperativeHuobi, formerly known as Huobi, has begun the process of applying for a cryptocurrency license in Hong Kong, indicating its intention to set up a business in the territory under an entity called HBGL Hong Kong Limited. The move comes amid a growing number of cryptocurrency companies vying for regulatory approval to operate in the lucrative Hong Kong market.
Growing interest in Hong Kong’s cryptocurrency environment
HTX’s application follows a recent trend of cryptocurrency exchanges seeking approval from the Securities and Futures Commission (SFC) to operate in Hong Kong. Another prominent exchange, Bybit, recently submitted an application, reflecting increased interest in the region’s evolving regulatory environment.
Despite this surge in applications, the SFC has so far only granted licenses to two exchanges, OSL and HashKey Exchange, raising questions about the effectiveness of Hong Kong’s cryptocurrency regulatory framework.
Also Read: Crypto.com Joins Bybit, OKX: Rush for Hong Kong SFC Crypto Exchange License
Criticism of Hong Kong’s cryptocurrency licensing system
Hong Kong’s regulatory regime for cryptocurrency exchanges aims to provide oversight and consumer protection, but its effectiveness has been criticized.
Wang Yang, vice-chancellor of the Hong Kong University of Science and Technology, expressed concern about the existing licensing system, noting that it is cumbersome and potentially harmful to licensed exchanges. He coined the term “license to kill” to highlight the difficulties faced by exchanges such as OSL, which have experienced significant financial losses following licensing.