11 Hong Kong Crypto Exchange Applicants Face Uncertainty After Inspections
Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...
11 Hong Kong cryptocurrency exchanges, which initially received provisional approvals, are now under increased regulatory scrutiny.
The city’s Securities and Futures Commission (SFC) conducted on-site inspections of these “deemed-to-be-licensed” platforms and found several practices that fell short of regulatory expectations, Bloomberg reported, citing sources familiar with the situation.
The inspections revealed that some crypto firms are overly dependent on a limited number of executives for the custody of client assets, raising concerns about their ability to manage these responsibilities effectively.
Additionally, some exchanges were found lacking in robust measures to protect against cybercrime.
The SFC has not disclosed which specific firms failed to meet the standards, and the inspections are still ongoing, leaving the possibility of further findings.
Among the 11 exchanges under review are well-known global players such as Crypto.com and Bullish, alongside local platforms like HKbitEX, PantherTrade, and Matrixport HK.
The SFC said that these inspections are part of their effort to ensure that applicants adhere to stringent requirements, particularly concerning the safeguarding of client assets and adherence to know-your-client (KYC) processes.
The SFC warned that platforms unable to address critical deficiencies identified during inspections could face the removal of their “deemed-to-be-licensed” status or have their license applications rejected outright.
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