A Hong Kong regulator has expressed dissatisfaction with ongoing inspections of cryptocurrency exchanges waiting to be fully licensed in the region. Some applicants received initial approvals from the city’s regulator but are yet to be fully licensed, subject to total compliance with the Hong Kong Securities and Futures Commission’s (SFC) requirements.
During on-site scrutiny, the SFC found that a few crypto exchanges that are “deemed to be licensed” are not managing cybercrime risks appropriately. Others are excessively dependent on a handful of executives to supervise the custody of client assets, a Bloomberg report said, citing sources it did not identify.
Deemed-to-be-licensed applicants fall under a short-term framework designed for crypto firms operating in the region before the licensing regime was enacted.
Starting June 1, operating an unlicensed virtual asset trading platform (VATP) in Hong Kong became a criminal offense, and the SFC said it would actively pursue companies violating the regulation.
Crypto exchanges that have yet to receive full operational licenses in Hong Kong include Crypto.com, Bullish, HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixin.com, EX.IO, YAX, WhaleFin and Matrixport HK.
