by Jude Ayua

The Hong Kong Securities and Futures Commission (SFC) has issued operational licenses to two Hong Kong-based crypto exchanges. Registered under the Securities and Futures Ordinance (SFO), the companies, YAX (Hong Kong) Limited and PantherTrade (Hong Kong) Limited, received the license to deal in securities and provide automated trading services.

Tiger Brokers (HK) Global Limited (Tiger Brokers), YAX’s parent company, announced YAX’s license, noting the company can now “extend its operations to include retail business.”

Wu Tianhua, CEO and Co-Founder of Tiger Brokers, noted the rapid growth of the global virtual asset sector and its potential. Tianhua said, “Cryptocurrencies are a key future investment trend…” noting “Tiger Brokers has actively promoted the development of virtual assets, fostering a prosperous virtual asset ecosystem in Hong Kong and helping the city become a global center for virtual asset trading.” 

CEO of YAX (Hong Kong) Limited, Kelvin Liu Kai, said, “As a pioneer of innovation, YAX is committed to providing users with a safer, more efficient, and open trading platform while addressing various challenges in cryptocurrency trading.” Kai added that going forward, “YAX will focus on enhancing trading speed, reducing custodial risks, and ensuring transparency and security… to create the best trading experience possible for our users.”

In an earlier announcement on its platform, PantherTrade informed users: “Since June 1, 2024, PantherTrade (Hong Kong) Limited has become a “deemed-to-be-licensed” VATP/VASP applicant under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).” However, PantherTrade is yet to announce its operational licence as of the time of this report.

Read also: Hong Kong’s SFC approves four crypto exchanges.

Virtual assets regulation in Hong Kong

In December 2024, Hong Kong SFC approved four virtual asset trading platforms (VATPs) after the first two earlier in October. The SFC noted it is speeding up the licensing of more VATPs by the end of 2026.

Despite the ongoing licensing, the SFC chairperson, Julia Leung, confirmed that the Commission would continue to maintain strict standards to ensure consumer safety. The Hong Kong government also recognizes the rapid growth of its crypto market, highlighting the efforts to regulate the market comprehensively.

In a related development, the Hong Kong Legislative Council’s Committee on Stablecoin Bill met on 21 January to discuss stablecoin regulations in the region. The discussion focused on creating a regulatory framework for all digital assets with emphasis on stablecoin issuers’ compliance with know your customer, anti-money laundering, and counter-financing of terrorism standards. The committee also noted that stablecoin issuers must have sufficient stablecoin reserves to maintain investor protection.

Related jurisdictions

Singapore: A recent Bloomberg report highlighted Singapore’s leading role in crypto adoption in Asia, as a strong competitor to Hong Kong. The report noted that Singapore surpassed Hong Kong in terms of regulatory efficiency and appeal in 2024. Singapore issued 13 licenses last year, while Hong Kong failed to meet its 11 licences’ target for 2024.

South Africa: In December 2024, South Africa’s Financial Sector Conduct Authority (FSCA) announced it approved 248 crypto asset service providers (CASPs) out of 420 applications. The FSCA declined nine while 106 voluntarily withdrew following engagements on business models. Declined applicants or those who voluntarily withdrew could reapply upon meeting regulatory criteria. However, they were prohibited from CASP-related activities. The FSCA continued to process 56 applications as part of its regulatory oversight of the crypto industry.

Nigeria: In August 2024, Nigeria’s Securities and Exchange Commission (SEC Nigeria) announced it granted in-principle virtual asset service provider (VASP) licences to two Digital Assets Exchanges (DAXs) under its Accelerated Regulatory Incubation Program (ARIP). The SEC also admitted five firms to test their models and technology. The SEC disclosed it was processing more applications and would approve them if they met the applicable requirements.

As the global crypto market continues to grow wider, regulators around the world are working effortlessly to exercise oversight of the market. While the majority, such as Hong Kong, are focusing on consumer and investor protection, others such as the UAE, US, and UK are pushing to become regional and global hubs. Meanwhile, countries like Thailand are considering crypto regulation for the first time. In general, more countries are making it easier for the crypto market to grow as they create favorable environments for its adoption.

Read also: BTC and ETH recover as spot Bitcoin, Ether ETFs receive approval in Hong Kong.    

 

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Jude Ayua is a policy analyst at CAB. A lawyer, Jude is an associate at Infusion Lawyers where he is a member of the Blockchain & Virtual Assets Group. He is also a member of the Policy & Regulations Committee of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN). Jude reports and writes on crypto policy and regulations. jude@infusionlawyers.com