Hong Kong’s Securities and Futures Commission (SFC) has issued an in-principle approval to Hong Kong Virtual Asset Exchange (HKVAX) to operate a virtual asset trading platform under the region’s securities laws.
On Aug. 11, HKVAX announced that it had received an “approval-in-principle” from the SFC to carry out Type 1 and Type 7 regulated activities. The announcement highlighted that a Type 1 license allows the platform to operate a digital asset trading platform that deals with securities, while a Type 7 officially allows the company to provide automated trading services to retail users and institutional investors.
According to the announcement, HKVAX is aiming to offer a product category called security token offerings to leverage Web3 investment opportunities. Once the exchange receives the final approval, it noted that it will offer over-the-counter (OTC) brokerage that allows users to trade between fiat and digital assets, an institutional-grade exchange platform and an insured custody solution.
Anthony Ng, co-founder and CEO of HKVAX, said in the announcement that as the exchange grows, it will continue to expand its product offerings in Hong Kong and work with strategic investors for its next funding rounds.
HKVAX’s announcement comes after Hong Kong debuted crypto retail trading with exchanges HashKey and OSL. On Aug. 3, both firms became the first to obtain the necessary licenses to offer crypto trading services in Hong Kong.
Hong Kong regulators have recently been focused on regulating crypto since the FTX collapse. On June 24, SFC CEO Julia Leung Fung-yee said that crypto trading is an important part of the virtual asset ecosystem after the FTX exchange collapse in 2022. In a speech, Leung said that the new licensing system for virtual asset service providers will ensure that investors are protected as they trade.