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Hong Kong Authorities License First Crypto Exchanges for Retail Trading

Retail cryptocurrency traders in Hong Kong can now buy and sell to their heart’s content, as local exchanges, HashKey and OSL have both received uplifts to their licenses from the HK Securities and Futures Commission. Previously, crypto trading in the region was limited to professional investors.

Hong Kong has taken the latest step along its path towards distancing itself from the strict anti-crypto regime of mainland China and pursuing its stated aim of becoming an international crypto hub. Retail traders in the region have just been given the green light to enjoy the same freedoms as professional investors, as two local exchanges have this week received uplifts to their licenses, enabling them to offer services to non-professional users.

Local exchange HashKey announced its news in an August 3 press release. While the exchange was already licensed by the HK Securities and Futures Commission (SFC) to provide cryptocurrency trading services to professional investors, the upgrades to its Type 1 and Type 7 licenses mean that it is now able to offer the same services to retail traders.

As an existing license holder for professional investors, HashKey was able to upgrade its licenses via a simplified process compared to a new entrant in the market. HashKey claims to be the first exchange to receive the upgraded retail license, with COO Livio Weng saying:

“We are thrilled to become the first licenced trading platform in Hong Kong dedicated to serving retail users. With the establishment of licenced 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.”

The exchange had always touted its safety protocols, with regulatory compliance being built in since the design stage, and a multi-layered approach to protecting user assets. Deposited funds are kept strictly separate from operational budgets, with a reported 98% in cold storage and just 2% in hot wallets.

HashKey simultaneously announced the launch of its new brokerage arm, representing the first compliant OPT services in Hong Kong.

Challenging HashKey for the title of first licensed retail trading platform in Hong Kong was OSL, which also announced its license uplift via press release on August 3. Also describing itself as the “world's first SFC-licensed and insured digital asset platform.” OSL allows retail traders to register and buy or sell digital assets “effective immediately”, although this is initially limited to just BTC and ETH.

Hong Kong’s crypto-friendly licensing regime came into force at the start of June, but has been making news for several months. As we Observed in early summer, one of the prerequisites for a token to be retail-tradable is that it is included on at least two indices, leading a local rating agency to create a new index to fulfil this.