Hong Kong’s cryptocurrency landscape is evolving rapidly, with the Securities and Futures Commission (SFC) issuing its first operational licenses of 2025 to PantherTrade and YAX. This marks a significant milestone in Hong Kong’s ambition to become a leading digital asset hub. But how does this compare to Singapore’s regulatory framework? Let’s explore the intricacies of Hong Kong’s licensing process, its impact on innovation, and what this means for crypto exchanges in Asia.
Hong Kong’s First Licensed Crypto Exchanges
On January 27, 2025, the SFC granted operational licenses to PantherTrade and YAX, both registered under Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).
- YAX: A subsidiary of Tiger Brokers (HK), YAX plans to offer securities trading and automated services post-launch. CEO Kevin Liu Kai emphasized the license’s role in ensuring secure, transparent trading with enhanced custodial security.
- PantherTrade: Received a Deemed VASP license but has yet to disclose detailed operational plans.
The licensing signals Hong Kong’s commitment to fostering innovation while maintaining strict regulatory standards.
Licensing Trends and Market Expansion
Hong Kong’s VASP licensing framework, introduced in 2024, aims to attract global crypto businesses. Key developments:
- 9 licenses issued so far, with accelerated approvals expected by 2026.
- SFC Chair Julia Leung stresses consumer safety via rigorous compliance checks.
- Government adopts risk-based, prudent measures for digital asset regulation (SFC Report, February 2024).
Despite growth, high compliance costs and restrictions (e.g., no mainland Chinese clients) challenge new entrants.
👉 How Hong Kong’s Crypto Regulations Compare Globally
Hong Kong vs. Singapore: Regulatory Showdown
Singapore’s efficient licensing process (13 licenses in 2024) contrasts with Hong Kong’s slower, stricter approach:
| Factor | Hong Kong | Singapore |
|--------------------|----------------------------------------|-----------------------------------|
| Licenses Issued | <10 since 2020 | 13 in 2024 |
| Token Flexibility | Restrictive listings/custody | More lenient |
| Major Players | Exiting exchanges (OKX, Bybit) | OKX, BitGo remain |
Angela Ang (TRM Labs) notes Hong Kong’s policies may hinder profitability despite high standards.
Challenges and Opportunities for New Exchanges
Challenges
- High compliance costs deter large exchanges.
- Mainland China restrictions limit customer base.
- SFC enforcement risks for non-compliance.
Opportunities
- Stablecoin regulations: Issuers must register with HKMA, adhering to KYC/AML standards.
- Reserve requirements protect consumers, boosting market trust.
👉 Why Stablecoins Are Key to Hong Kong’s Crypto Future
The Future of Crypto in Hong Kong
Hong Kong’s balance of consumer protection and regulatory efficiency will determine its competitiveness. Learning from Singapore’s model could help:
- Streamline licensing without compromising safety.
- Expand token offerings beyond BTC/ETH.
- Lower barriers for innovative startups.
With these steps, Hong Kong could solidify its position as Asia’s digital asset leader.
FAQ
Q: How many crypto licenses has Hong Kong issued?
A: As of 2025, 9 VASP licenses have been granted, with more expected by 2026.
Q: Why are exchanges like OKX leaving Hong Kong?
A: Strict regulations and high compliance costs make operations less viable compared to other markets.
Q: What advantages does Singapore have over Hong Kong?
A: Faster licensing, flexible token policies, and a more established crypto ecosystem.
Q: Are stablecoins regulated in Hong Kong?
A: Yes—issuers must register with HKMA and maintain reserve-backed stability.
Q: Can mainland Chinese investors use Hong Kong exchanges?
A: No, the SFC prohibits serving mainland residents.
Q: What’s next for Hong Kong’s crypto market?
A: Expect tighter stablecoin rules and efforts to attract global players through regulatory clarity.