Cryptocurrency exchange OKX intends to apply for a Virtual Assets Service Provider (VASP) license to operate in the city-state, according to a March 28 press release.
OKX is the latest crypto firm to look to set up shop in Hong Kong after the country’s pivot to a more crypto-friendly stance. The exchange’s General Counsel Bing Zhao said:
“OKX has an ambitious vision when it comes to pursuing licenses in relevant and appropriate jurisdictions, and we are committed to working with the SFC throughout the application process.”
The exchange’s managing director of global institutional Lennix Lai said Hong Kong has “immense potential” for crypto firms and OKX intends to work with regulators on “building the local ecosystem” over the next five years.
The exchange has been working on its plans for more than a year now and is fully prepared to meet all regulatory requirements for its VASP application.
According to a South China Morning Post report, OKX will set up two entities in the city-state called Hong Kong Fintech Company Limited and Hong Kong Custody Limited to handle its various operations. The former will apply for brokerage and exchange licenses, while the latter will apply for licenses that allow it to hold and custody assets.
Hong Kong’s crypto regulatory regime
Hong Kong intends to legalize crypto trading for retail investors on June 1 and has been working on setting up a regulatory regime for the industry over the past few months.
The regime includes the VASP license to allow crypto exchanges to operate in the country with full authorization. Without the license, firms will not be allowed to offer services to retail investors.
A number of exchanges are looking to move to Hong Kong in some capacity once the regulatory framework comes into effect and some are already in the process of securing the necessary approvals.
Meanwhile, regulators are working on establishing banking relationships for crypto firms that adhere to its stringent KYC and AML requirements, according to a Bloomberg News report.
The event will take place on April 28 and will be led by the Hong Kong Monetary Authority and the Securities and Futures Commission.
The two regulators are in charge of supervising stablecoins and cryptocurrency exchanges.