Web3 firms are spending up to $25M on HK crypto licenses: ReportJune 27, 2023
According to a June 27 report by local news outlet Foresight News, Web3 firms in Hong Kong are spending anywhere between 20 million and 200 million Hong Kong dollars ($2.55 million and $25.5 million) for the acquisition of a Virtual Asset Service Provider (VASP) licenses. Sources explained:
“Since traditional financial institutions have no relevant prior infrastructure, and have gone from zero to one in various aspects such as products and teams, the cost [associated with VASPs] has been very high. However, even for an experienced cryptocurrency institution, the cost of obtaining a license is not cheap.”
Analysts at Foresight mentioned that Hong Kong subsidiaries of exchanges such as OKX, BitgetX, HashKey Pro, OSL and Gate.io have already begun operations. As of June 27, OKX has since grown to 8,800 registered users in Hong Kong with a cumulative trading volume of $150 million in the special administrative region (SAR) of China.
On June 1, Hong Kong unveiled new VASP licensing requirements for cryptocurrency exchanges. Among many items, firms must make proper disclosures on user statistics and company financials to the Securities and Futures Commission of Hong Kong for regulatory approval. Exchanges that do not abide by the requirements will be required to cease operations in the SAR by the middle of next year.
The same day, the Hong Kong Virtual Asset Consortium published its virtual asset index consisting of major cryptocurrencies such as Bitcoin (BTC) and Ether (ETH), alongside altcoins and privacy tokens. The new organization seeks to provide ratings services and indexes to facilitate retail crypto trading in the SAR and is supported by Huobi, KuCoin, Bitget and others.
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