HashKey Exchange Receives Hong Kong's First Regulatory License

HashKey Exchange has become the Hong Kong's first licensed trading platform under the new regulatory regime.

The company's existing licenses have been upgraded, allowing it to offer retail trading services for digital tokens in the city.

This move aligns with the authorities' efforts to establish Hong Kong as a global hub for the digital asset industry.

Hong Kong initiated a mandatory crypto framework in June, aiming to restore its reputation as a cutting-edge financial center.

This shift has garnered considerable interest, especially when compared to the digital-asset crackdown in the United States. However, despite the enthusiasm, the city has yet to attract major investments from an industry still recovering from the market downturn last year.

The new regulatory rules in Hong Kong permit crypto exchanges to offer trading services to both individual and institutional investors, provided they secure and comply with licenses designed to mitigate the risky practices exposed during the 2022 market crash and the FTX platform collapse.

Retail investors will be limited to trading larger coins like Bitcoin and Ether, which must be featured in at least two acceptable and investible indexes.

Additionally, the requirements for risk assessments, insurance cover, and asset custody may result in increased operating costs for crypto exchanges.

Banking regulator Hong Kong Monetary Authority (HKMA) said in June that it had asked lenders operating in the region to try and meet the business needs of licensed crypto exchanges in April.