The Hong Kong Securities and Futures Commission (SFC) has granted preliminary approval to the Hong Kong Virtual Asset Exchange (HKVAX) to operate a virtual asset trading platform within the framework of the region’s securities regulations.
HKVAX recently disclosed that it has secured an “approval-in-principle” from the SFC, authorizing the execution of Type 1 and Type 7 regulated activities.
The Type 1 license empowers the platform to administer a digital asset trading system dealing with securities, while the Type 7 classification formally permits the company to furnish automated trading services to both retail customers and institutional investors.
In pursuit of capitalizing on the investment prospects presented by Web3, HKVAX is striving to introduce a new category of offerings known as security token offerings.
Once the final endorsement is obtained, the platform intends to provide a range of services, including over-the-counter (OTC) brokerage facilities facilitating transactions between fiat and digital assets.
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Moreover, the platform plans to establish an institutional-grade exchange platform and a secure custody solution, backed by insurance provisions.
Anthony Ng, who serves as the co-founder and CEO of HKVAX, articulated that as the platform’s operations expand, the entity remains committed to broadening its array of products available in the Hong Kong market.
Simultaneously, HKVAX intends to collaborate with strategic investors during its forthcoming funding rounds.
The announcement from HKVAX emerges in the wake of HashKey and OSL, two exchanges, debuting retail cryptocurrency trading activities in Hong Kong.
These exchanges made history on August 3 as the first entities to be granted licenses to facilitate crypto trading services in the jurisdiction.
Hong Kong’s regulatory authorities have intensified their scrutiny of the cryptocurrency sector following the FTX collapse.
The CEO of the SFC, Julia Leung Fung-yee, stressed the importance of crypto trading within the virtual asset ecosystem in light of the FTX exchange’s downfall in 2022.
In a public address, Leung emphasized that the newly implemented licensing structure for virtual asset service providers aims to safeguard investors as they engage in trading activities.
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