Web3 companies in Hong Kong are investing between HKD 20 million and HKD 200 million (USD 2.55 million to USD 25.5 million) to obtain licenses under the virtual asset service provider (VASP) regime, according to a June 27 report by local news agency Foresight News. Sources note that the costs associated with VASP licenses are very high, especially for traditional financial institutions that do not have prior infrastructure in this area and need to create products and teams from scratch. Even for an experienced cryptocurrency institution, the cost of obtaining a license is not negligible.
Initial operations and market impact
Hong Kong subsidiaries of exchanges such as OKX, BitgetX, HashKey Pro, OSL, and Gate.io have already started their operations. As of June 27, OKX had 8,800 registered users in Hong Kong and a cumulative trading volume of USD 150 million in the Special Administrative Region (SAR) of China. On June 1, Hong Kong unveiled new VASP licensing requirements for cryptocurrency exchanges. Among the many elements, companies must provide appropriate information on user statistics and financial data of the company to the Hong Kong Securities and Futures Commission for regulatory approval. Exchanges that fail to meet these requirements will have to cease their activities in the SAR by mid-next year.
The Hong Kong Virtual Asset Consortium (HKVAC) and its virtual asset index
On the same day, the Hong Kong Virtual Asset Consortium (HKVAC) released its virtual asset index including major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), as well as altcoins and privacy tokens. The new organization aims to provide rating services and indices to facilitate retail cryptocurrency trading in the SAR. It is supported by players such as Huobi, Kucoin, Bitget, and others.
Implications for companies and investors
The high costs associated with obtaining a VASP license in Hong Kong can be a deterrent for some companies, especially those entering the cryptocurrency sector. However, these licenses offer some legitimacy and a clear regulatory framework, which can be beneficial for investors and end users. Companies looking to keep up with the evolving cryptocurrency market and regulations in Hong Kong can use tools such as cryptoview.io to stay informed and make informed decisions.
If you want to learn more about VASP licenses in Hong Kong and their impact on the cryptocurrency market, feel free to check out the cryptoview.io app for up-to-date and accurate information. Discover cryptoview.io now
