What is the background of the four licensed cryptocurrency trading platforms confirmed by the Hong Kong Securities and Futures Commission?

Background of four licensed crypto trading platforms confirmed by HK SFC?

On September 25th, as the JPEX fraud scandal in Hong Kong continues to ferment, the Securities and Futures Commission (SFC) of Hong Kong held a press conference on the same day, stating that it will further strengthen the release of information on virtual asset investments and investor education, and enhance the public’s understanding of virtual trading platforms. The SFC stated that it will publish a “Virtual Asset Trading Platform Applicant List”, and currently there are 4 institutions on the preliminary applicant list.

According to the Hong Kong Economic Daily, these 4 institutions are HKVAX, HKBitEx, Hong Kong BGE Limited, and Victory Fintech ComLianGuainy Limited.

These 4 institutions are all from Hong Kong, which is different from the previously reported “popular” applicants, which also means that the previously announced local cryptocurrency exchanges have not formally submitted their applications.

HKVAX

HKVAX (Hong Kong Virtual Asset Exchange) is one step ahead of the other three institutions and claims to have obtained the SFC’s preliminary approval. On August 11th, a press release on its official website stated that the final approval of the regulatory authorities will allow the company to provide regulated activities of Type 1 (securities dealing) and Type 7 (automated trading services) to its clients. Once the regulatory procedures are completed, HKVAX will provide users with three core products – OTC brokerage, institutional-grade trading platform, and custodial solutions.

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HKVAX co-founder and COO, Ho Siu Leung, revealed that they have spent 3 years from applying for the license to the present. It is expected to take at least another half a year to obtain the formal license. In addition, the official website shows that HKVAX has three co-founders, among whom the CEO, Ng Wai Leung, was formerly the Executive Director of International Department at CITIC Futures and is currently the Vice Chairman of the Financial and Treasury Services Committee of the Hong Kong General Chamber of Commerce (HKGCC).

Victory Fintech ComLianGuainy Limited

Victory Fintech ComLianGuainy Limited is a company invested by Victory Securities, a well-established local securities firm, and its board of directors includes Gao Juan, Chairperson of the Hong Kong Securities Association.

Victory Securities has been active in virtual asset investment in recent years and holds licenses from the SFC for Type 1 (virtual asset trading), Type 4 (virtual asset advisory services), and Type 9 (virtual asset asset management services). On its virtual asset-related introduction page, it even uses the advertising slogan “Buying stocks, buying coins, equally simple”. In addition, on March 8, 2023, OSL announced a strategic partnership with Victory Securities.

Recently, Victory Securities’ official website announced that its virtual asset trading app is the “first compliant virtual asset trading application in the Hong Kong financial market”, and the cryptocurrency trading services provided in the initial stage for professional investors are provided by OSL.

HKbitEX

According to the official website information, HKbitEX was established in 2019 by a group of former senior executives of the Hong Kong Stock Exchange, including founder Gao Han. In 2020, HKbitEX successfully completed a $10 million Series A2 financing round, led by Axion Global Investment Limited, a wholly-owned subsidiary of Hong Kong-listed company Anlink International, and Hanwha Asset Management.

According to the official website introduction, HKbitEX is “committed to providing a compliant and regulated digital asset spot trading platform and over-the-counter trading platform for global professional investors. It is one of the first institutions in the Asia-Pacific region to apply for a virtual asset trading platform license from the Hong Kong Securities and Futures Commission.”

HKBGE

HKBGE is a subsidiary of HKE Holdings Limited, established on April 19, 2021. HKBGE wholly owns HKBGE TSP Limited, which obtained a TCSP license (Trust or Company Service Provider license) under AMLO in September 2021, providing virtual asset custody services for HKBGE’s trading platform.

According to Hong Kong Economic Times, the market value of HKBGE’s parent company, HKE Holdings, is about 2.3 billion yuan. The chairman and largest shareholder of the company is 31-year-old Lian Haomin. Lian Haomin participated in the Hong Kong Election Committee elections in 2021 and was automatically elected. In 2022, he filed a petition for the liquidation of China Evergrande (03333) in the High Court, attracting media attention. There is speculation that he is the son of Stanley Ho, known as the “King of Gambling,” but this has not been confirmed.

Ouyang Jiannan, the director and CEO of HKBGE, is one of the founding members of HashKey Digital Asset Group and has been the head of HashKey’s strategic planning and chief operating officer of its SFC-licensed virtual asset trading platform since 2018. According to the latest company registration information, HK BGE currently has only two directors, Ouyang Jinpei and Ji Dana, who are in charge of company operations and business development, respectively. The company’s website is currently only open to invited professional investors.

HKBGE is applying for a virtual asset trading platform license. The company’s chief legal officer, Li Mingjun, said that it took about 1 to 2 years for the company to apply for the license. Currently, it is in the stage of receiving confirmation, and the next stage is preliminary approval. Based on the experience of licensed companies, it usually takes 4 to 6 months to obtain the license after receiving preliminary approval.

It is reported that the Securities and Futures Commission will also release multiple lists of virtual asset trading platforms, including the “licensed virtual asset trading platform list,” “closed virtual asset trading platform list,” and “virtual asset trading platform list treated as licensed.” In addition, the Securities and Futures Commission will also publish a dedicated list of suspicious virtual asset trading platforms on its website.

It is worth mentioning that in a previous interview with CoinDesk, HTX Global Advisor Sun Yuchen stated that HTX expects to obtain a Hong Kong license within 6 to 12 months. As of now, HTX has not disclosed the latest progress.

On September 25th, according to OKX’s Chinese Twitter account, it is currently planned to submit the formal application before the end of October.

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