The Hong Kong Securities and Futures Commission (SFC) is gearing up to approve additional cryptocurrency exchanges before the end of 2025, signaling a renewed push to strengthen the city’s position as a regulated hub for digital assets. Julia Leung, Executive Director of the SFC, recently confirmed that the regulatory body is actively reviewing multiple applications, with several platforms undergoing on-site assessments.
This development follows the recent licensing of HKVAX, which became the third cryptocurrency exchange officially authorized to operate in Hong Kong. Alongside HKVAX, established players such as HashKey and OSL already hold upgraded licenses, demonstrating early progress in the city’s structured regulatory framework. Notably, Bullish — the parent company of CoinDesk — is also among the applicants, highlighting growing international interest in Hong Kong’s evolving crypto landscape.
Expanding the Regulated Crypto Ecosystem
Currently, the SFC has either 11 or 16 platforms listed on its website as being under active review, though it has not disclosed the total number of applicants. These evaluations are part of a broader effort to ensure compliance with strict operational, security, and investor protection standards.
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The upcoming wave of potential approvals comes at a critical time. Critics have argued that Hong Kong’s stringent licensing requirements could hinder its ambition to become a leading center for Web3 and blockchain innovation. While regulation is essential for market integrity, concerns have been raised about whether current policies are flexible enough to support rapid technological advancement.
Regulatory Challenges and Industry Response
Earlier in 2025, scrutiny intensified over certain operational practices within local exchanges. Issues included over-reliance on a small number of executives for asset management decisions and inadequate cybersecurity measures against digital threats. These vulnerabilities were starkly exposed during the JPEX scandal, where more than 2,600 investors lost approximately $200 million. Although arrests have been made in connection with the case, no formal charges have yet been filed.
This incident significantly impacted public trust and prompted deeper examination of the SFC’s oversight role. Lawmaker Duncan Chiu criticized the commission’s rigid evaluation criteria, suggesting they may not align well with the fast-paced nature of the Web3 industry. He emphasized the need for regulators to balance compliance with innovation-friendly policies.
Several major international exchanges have also responded to Hong Kong’s regulatory stance. Giants like Coinbase withdrew their applications, while OKX and Bybit canceled theirs — potentially due to the SFC’s directive requiring platforms to block access from mainland Chinese users. In contrast, Crypto.com remains in the application pipeline, indicating that some global players are still committed to entering the Hong Kong market under current conditions.
Core Keywords Driving Market Interest
To better understand the dynamics shaping this regulatory shift, key terms define the current discourse:
- Cryptocurrency exchange licensing
- Hong Kong SFC regulation
- Web3 development in Asia
- Digital asset compliance
- Blockchain innovation hub
- Crypto regulation 2025
These keywords reflect both regulatory priorities and market expectations. They appear naturally across policy discussions, industry analyses, and investor communications — underscoring the importance of aligning technical capabilities with legal frameworks.
Building Trust Through Transparency and Oversight
One of the central goals of the SFC’s licensing process is to rebuild investor confidence after high-profile failures like JPEX. The current evaluation phase involves rigorous on-site audits, including assessments of cold wallet storage, transaction monitoring systems, and anti-money laundering (AML) protocols.
Platforms must also demonstrate clear separation between client and corporate assets, robust governance models, and transparent fee structures. These requirements aim not only to prevent fraud but also to create a sustainable ecosystem where innovation thrives within defined boundaries.
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For emerging projects aiming to serve institutional and retail clients alike, compliance is no longer optional — it's a competitive advantage.
The Road Ahead for Hong Kong’s Crypto Ambitions
Despite challenges, Hong Kong continues to position itself as a gateway between traditional finance and decentralized technologies. With support from both public and private sectors, initiatives promoting blockchain adoption in areas like tokenized assets, central bank digital currencies (CBDCs), and decentralized identity are gaining momentum.
The anticipated approval of additional exchanges by year-end could mark a turning point — one that shifts focus from crisis management to forward-looking growth strategies. If executed effectively, this next phase may attract new investments, foster talent development, and enhance cross-border collaboration in fintech.
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However, success will depend on the SFC’s ability to maintain a balanced approach: enforcing accountability without stifling innovation.
Frequently Asked Questions (FAQ)
Q: How many cryptocurrency exchanges are currently licensed in Hong Kong?
A: As of now, three exchanges — HashKey, OSL, and HKVAX — hold full operating licenses issued by the SFC under the new regulatory regime.
Q: Why did some major exchanges like OKX and Bybit cancel their applications?
A: While neither company provided an official statement, industry analysts believe the requirement to block mainland Chinese users played a significant role in their decision.
Q: What is the JPEX scandal and how did it affect crypto regulation in Hong Kong?
A: JPEX was an unlicensed trading platform that allegedly defrauded over 2,600 investors of around $200 million. The incident triggered widespread regulatory scrutiny and led to stricter enforcement of licensing rules.
Q: Is Hong Kong still aiming to become a Web3 hub despite regulatory hurdles?
A: Yes. Government officials and financial regulators continue to express strong support for blockchain innovation, emphasizing that regulation is meant to enable safe growth rather than deter it.
Q: What are the main criteria for obtaining an SFC crypto exchange license?
A: Key requirements include robust cybersecurity infrastructure, proper custody solutions for digital assets, AML/KYC compliance, senior management integrity checks, and comprehensive risk management frameworks.
Q: When can we expect new approvals from the SFC?
A: Julia Leung indicated that more licenses could be granted before the end of 2025, particularly for platforms currently undergoing final on-site evaluations.