Hong Kong crypto exchange licenses come with a hefty price tag, costing applicants millions of dollars, a significant decrease from the $25 million required a year ago.
In a recent discussion with the Financial Times, Livio Wang, the chief operating officer of HashKey Group, revealed that obtaining crypto exchange licenses in Hong Kong now costs “not necessarily tens of millions of dollars, but certainly tens of millions of Hong Kong dollars,” translating to several million U.S. dollars. Wang pointed out that the expenses for license review materials differ from those incurred during the operational stage.
Since June 1, Hong Kong authorities have cracked down on unlicensed crypto exchanges in the city, imposing criminal charges for noncompliance. Currently, over 11 companies hold the designation of being “deemed to be licensed,” with only two fully licensed exchanges, HashKey and OSL, operating in the region.
During the interview, Wang disclosed that HashKey Exchange, which manages $500 million in user assets, has facilitated $440 billion in cumulative trades since its inception. He highlighted a significant increase in customer activity, with a 267% rise in activated customers compared to the previous week and a tripling in the number of newly activated customers.
In April, HashKey expanded its operations globally by establishing HashKey Global, a blockchain exchange based in Bermuda to cater to international users. Unlike its Hong Kong-based counterpart, HashKey Global will not serve customers in Hong Kong, China, the United States, or several other regions. This decision was influenced by the success of HashKey Exchange, the first licensed crypto exchange in the region, setting a precedent for operating in the area.
The launch of Hong Kong’s exchange licensing system faced setbacks last year when an unlicensed crypto exchange, JPEX, disregarded regulations and defrauded investors of $166 million before collapsing in September 2023.
In other news, Mt. Gox is holding off on selling Bitcoin, while Hong Kong continues to crack down on unlicensed crypto exchanges.