hongkongweb3

Regulatory worries have caused over a dozen exchanges to struggle to obtain complete licenses, which is a roadblock to Hong Kong's ambitions to become a crypto powerhouse.

During on-site inspections of 11 "deemed-to-be-licensed" exchanges, the city's Securities and Futures Commission reportedly found unacceptable procedures, casting doubt on the exchanges' capacity to fulfill all licensing requirements. According to the study, the research found that certain exchanges were unduly dependent on a small group of executives to oversee the custody of customer assets, while other exchanges are not "properly guarding against cybercrime risks."

According to reports, the exchanges under investigation include well-known ones like Crypto.com and Bullish in addition to regional platforms like HKbitEX and PantherTrade.

The SFC is focusing on enforcing strict compliance among crypto platforms, including safeguarding client assets and enforcing robust know-your-client protocols. This comes after a scandal involving JPEX, an unlicensed crypto platform accused of defrauding over 2,600 victims of more than $200 million. The SFC previously reported that JPEX and crypto influencers made false or misleading claims.

But, the regulator later mentioned that JPEX had not submitted any such application, despite its assertions of being a “licensed and recognized platform for facilitating the trading of digital assets and virtual currency.”

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