HashKey Exchange and OSL — the only two cryptocurrency exchanges licensed by the Hong Kong Securities and Exchange Commission (SFC) — both received upgrades to their licenses Thursday. A significant milestone in the development of Hong Kong’s Web3 industry, the upgrades will allow the two companies to serve retail investors with immediate effect.

See related article: Hong Kong’s crypto rules offer level playing field, investor protection, says OSL exchange executive

Fast facts

  • HashKey and OSL were previously only licensed to serve professional investors with a portfolio of at least US$1.02 million. The upgraded licences make them the first exchanges authorized to provide crypto asset trading services to retail investors in Hong Kong. 
  • Bitcoin and Ether are the only tradable assets currently permitted for retail investors on the two platforms, according to press releases from HashKey Exchange and OSL on Thursday.
  • The move came after the Hong Kong SFC kicked off its new crypto exchange licensing regime on June 1. That regime allows licensed exchanges to sell highly liquid cryptocurrencies to retail investors within a regulated framework.
  • “With the establishment of licensed trading platforms and the further clarity of regulatory frameworks in Hong Kong, the industry as a whole will witness increased transparency, leading to a significant boost in investor confidence,” said HashKey chief operating officer Livio Weng in his company’s press release
  • “This is a monumental moment not only for OSL but for the broader crypto market,” Gary Tiu, OSL’s head of regulatory affairs, said in his firm’s press release. “By granting this license uplift, the SFC has shown that it is possible for digital asset markets to be regulated and safe.”
  • The two platforms both pledged strict customer protection measures in their separate press releases. Those include maintaining a high cold-to-hot storage ratio for customer funds in line with an SFC guideline that requires crypto exchanges to store at least 98% of client virtual assets in cold storage.
  • At HashKey’s press release, the crypto exchange also announced a partnership with Standard Chartered Bank — one of three note-issuing commercial banks in Hong Kong — to provide fiat currency deposit and withdrawal services. The lender was reportedly urged by the Hong Kong Monetary Authority in May to provide banking services to crypto-related firms.
  • Meanwhile, other crypto exchanges including Huobi, OKX and BiMex have also expressed interest in obtaining licenses under Hong Kong’s new regulatory framework. 

See related article: Hong Kong legislator encourages Coinbase to set up shop in city under new crypto rules