HashKey Exchange has become the inaugural recipient of a license under Hong Kong’s new cryptocurrency regulatory framework. The approval allows the platform to legally facilitate the retail trading of tokens, as authorities aim to cultivate Hong Kong as a global hub for the crypto industry. Upgrading its existing licenses, HashKey now has the green light to provide services to retail investors in the city.
The Asia-based cryptocurrency startup, HashKey, previously participated in a voluntary licensing program in Hong Kong. With the upgrade of its Type 1 and Type 7 licenses, the exchange is now positioned to offer retail services in the city, as announced in its tweet on Thursday.
While the move attracted substantial interest and stood in contrast to the US’s digital-asset clampdown, Hong Kong has faced challenges in attracting significant investments from a crypto industry that endured a market downturn the previous year.
With the new Virtual Asset Service Provider licensing regime introduced on June 1, HashKey Exchange’s license approval comes merely two months after the initiative’s launch.
This license will enable HashKey’s trading platform to broaden its business scope, extending its services from professional investors to retail users.
Launched in the second quarter of 2023, HashKey Exchange initially catered to professional investors but sought to expand its services to a broader audience. As part of this effort, the platform applied for a retail service license under Hong Kong‘s virtual asset regulation policies on June 1.
HashKey Exchange has now officially opened pre-registration, with registered users being rewarded with HashKey EcoPoints ($HSK). The platform recently partnered with Standard Chartered Bank, enabling fiat currency deposit and withdrawal services for users. The firm is the only platform to comply with over-the-counter (OTC) trading services in Asia-Pacific, providing users with a broader array of trading options.
Operating under the umbrella of HashKey Group, a multifaceted company involved in venture funding, asset management, and trading, the firm has been exploring funding opportunities to raise a substantial amount between US$100 million and US$200 million.
As reported by Bloomberg News in May, the funding round aims to value the company at over US$1 billion. With its newly secured license, HashKey Exchange will likely meet its fund goals in the upcoming months.
In June, a government study revealed mounting apprehensions regarding Hong Kong’s position relative to its East Asian and Gulf counterparts in web3 development. The study emphasized the urgency of efforts to keep pace with the rapidly evolving landscape of blockchain and decentralized technologies.
Hong Kong’s new regulations require crypto trading platforms to acquire a license to cater to retail investors within the city. These rules aim to address the concerns raised by the 2022 market crash and the subsequent collapse of the FTX platform, highlighting the need to curb risky practices in the crypto industry.
By implementing the licensing system, authorities intend to ensure a more secure and regulated environment for crypto trading, offering protection to both individuals and institutions.
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