OUR SKILLED TEAM WILL ASSIST YOU SECURING A HONG KONG CRYPTO EXCHANGE LICENSE
Consulting24, recognized as the fastest-growing consultancy firm by volume in Singapore, Estonia, Lithuania, Dubai, and now Hong Kong, has successfully secured over 500 crypto licenses for its clients.
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WHY CHOOSE HONG KONG FOR YOUR CRYPTO EXCHANGE LICENSE?
Hong Kong offers clear crypto regulations, ensuring a secure environment for investors and operators.
Crypto exchanges must obtain SFC licenses, adhering to AML and CTF guidelines.
Access to capital
There's a keen interest in crypto investments among Hong Kong's populace.
Reputation and credibility
The city is a hub for blockchain and fintech innovation.
A crypto license signals a business’s commitment to regulatory compliance.
International access to markets
Licensing opens doors to the wider Asian financial markets.
REQUIREMENTS FOR HONG KONG LICENSED CRYPTO EXCHANGE
The Securities and Futures Commission of Hong Kong, visit here.
Crypto trading platforms facilitating trade in securities and futures contracts remain regulated by the existing Securities and Futures Ordinance (SFO).
Recent legislative developments have shifted the regulatory landscape for cryptocurrency exchanges in Hong Kong. The Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Act 2022 introduced stringent regulations, effective from April 1, 2023. Under the new framework, virtual asset service providers (VASPs) are mandated to secure a license from the Securities and Futures Commission (SFC) to operate lawfully.
Without this license, individuals and entities are prohibited from:
Running a virtual asset (VA) services business;
Claiming to operate such a business;
Conducting regulated activities for a VA service business;
Presenting oneself as engaged in regulated VA service functions;
Promoting VA services to the public.
The SFC started processing applications for crypto trading platform licenses on June 1, 2023. Check new roolbook.
Virtual Asset services, as defined by the amendments, encompass:
Consistently proposing to buy or sell virtual assets, culminating in a binding agreement;
Regular facilitation or mediation for parties in negotiations or transactions of virtual assets, resulting in binding agreements;
Handling client funds or virtual assets directly or indirectly.
You have to maintain at all times paid-up share capital of not less than HK$5,000,000 (640,000USD) and liquid capital of at least $380,000. Its required to hold liquid assets equivalent to at least a year of operating expenses, not counting virtual assets.
A Hong Kong licensed crypto exchange is obligated to securely store all customer virtual assets in wallets controlled by its Associated Entity, designated solely for holding these assets. The exchange must also segregate customers' virtual assets from the assets of both the exchange itself and the Associated Entity. Additionally, the licensed exchange is charged with ensuring the Associated Entity's adherence to these segregation and safeguarding mandates.
A Platform Operator should exercise due skill, care and diligence in the selection and appointment of the auditors70 to perform an audit of the financial statements of the Platform Operator and its Associated Entity, and should have regard to their experience and track record auditing virtual asset-related business and their capability in acting as auditors of the Platform Operator and its Associated Entity.
Check full Hong Kong Guidelines for Virtual Asset Trading Platform Operators
STEP-BY-STEP GUIDE TO OBTAINING A CRYPTO LICENSE IN HONG KONG
To secure a crypto license in Hong Kong, applicants must:
Declare their intention to operate within the Hong Kong market.
Satisfy the 'fit and proper' criteria, which involve assessments of:
Criminal history clearance.
Track record in anti-money laundering (AML) and counter-financing of terrorism (CFT).
Educational background and relevant certifications.
Personal and professional reputation, experience, integrity, and financial soundness.
Designate at least two individuals in the application who are deemed fit and qualified to offer virtual asset (VA) services, to serve as responsible officers.
Seek approval for the physical premises intended for storing mandatory records or documents as per regulatory requirements.
Be mindful that the SFC reserves the right to impose specific conditions on the issued license. These conditions may pertain to risk management, AML/CFT protocols, financial resources, cybersecurity measures, and more, as stipulated in Section 53ZRK of the regulation.
Applications must be submitted to the Commission following the prescribed protocol and should include the payment of the necessary fees.
For detailed guidance on the procedure and the timeline to obtain a crypto license in Hong Kong, consulting services are available to assist you further.
HOW MUCH DOES IT COST TO LICENSE CRYPTO IN HONG KONG?
Hong Kong Crypto License
Type of License
Providing a virtual asset service (operating a virtual asset exchange)
Scope of License
Centralised platforms providing trading services in non-security tokens* using an automated trading engine which matches client orders and also providing custody services as an ancillary service to their trading services
$4,740 for a VA service
Approval to become responsible officer
$2,950 for a VA service
$1,790 for a VA service
Licensing for a virtual asset service provider in Hong Kong involves various fees: $4,740 for the provider license, HKD $1,790 for a licensed representative, and $2,950 for approval to become a responsible officer under the Anti-Money Laundering Ordinance (AMLO). Additionally, legal fees can exceed $100,000 and estimated time can be over a year to complete.
I had an honor to work with Lena for last few years and I would highly recomend her to all who would need her services. It’s been a pleasure and very easy work and communication. Good kind & reliable person. True professional who provides professional services and timely response to all inquiries. Follows up with all updates and makes sure u are in the best standing u can be with your business by making sure that u are educated of what’s new and compliant.
- Ingrida Laukiene, Founder of DiamondBack Group