Octagon Strategy Limited (“OSL”), a Hong-Kong based digital asset brokerage firm, applies for a digital asset exchange license from the Securities & Futures Commission (SFC). The financial watchdog introduced changes to start issuing trade licenses to crypto exchange platforms.
Wayne Trench, CEO of OSL told the media,
“We congratulate the SFC on announcing its digital asset licensing regime and are proud to be the first applicant,”
OSL Application for Crypto Exchange in HK (Source)
Binance, Huobi, OKex have all obtained registration from countries like Malta. However, their main operational hubs are located in Hong Kong. The easing of regulations in Hong-Kong will likely motivate these exchanged to register there.
However, there is a catch in the licensing process
According to the SFC, the licenses will be issued to exchanges providing services to institutional investors only. Something that even the US authorities have permitted as well.
Moreover, the exchanges need to arrange for insurance of the funds. It must also be careful in the choice of cryptocurrency it adds on the platform. In all likelihood, it will allow not more than 5-6 cryptocurrencies in the beginning.
OKEX, one of the most prominent exchanges globally and in Hong Kong noted,
“We believe that a handful of exchanges will take the invitation to opt-in into SFC’s regulation plan, however, we do not expect to see a large number of exchanges rushing into the regulation net,”
The SFC’s hands are tied as well, as they cannot force regulation in the absence of laws for digital assets.