OSL Exchange CEO discusses expansion plans after historical year in Hong Kong

The exchange received regulatory approval to offer crypto trading to Hong Kong retail investors last August.

After the historical approval of retail crypto trading by Hong Kong regulators last August, crypto exchanges HashKey and OSL became the first pair of firms to be licensed under the new rules. Regulation has greatly benefited both firms. The publicly listed OSL exchange, formerly known as BC Technology Group, secured a $90-million investment shortly thereafter. In its most recent financial report, the company disclosed revenue of 105 million Hong Kong dollars ($13.4 million) from its digital assets and blockchain platform business, up 1,767% from the same period in H1 2022.

During an exclusive interview with Cointelegraph, Patrick Pan, CEO of OSL, said that the exchange plans to list altcoins as soon as they are approved by the region’s Securities and Futures Commission (SFC). “While we are always looking for opportunities to enrich our product suite, any decision to list new assets or products will be made in strict adherence to regulatory guidelines and market demand,” said Pan.

In addition to altcoins, Pan said that the firm is currently exploring a Fund Token initiative for the tokenization of retail fund products. “If authorized by the SFC, these Fund Tokens, representing shares in a novel collective investment scheme under the Harvest-OSL brand, will be available to retail investors in Hong Kong,” the CEO stated.

Regulators have been keen on exploring new digital asset initiatives as well. On Dec. 27, 2023, the Financial Services and Treasury Bureau (FSTB) and the Hong Kong Monetary Authority issued a public consultation paper on the legislative proposal for regulating stablecoin issuers in the region. “The regulatory environment is certainly moving towards greater inclusivity and robustness,” Pan commented. “This could very well lead to the SFC approving a broader range of digital assets, including stablecoins, for listing in the not-so-distant future.”

For the remainder of the year, the exchange plans to expand beyond Hong Kong and Singapore and will focus on digital finance as a main pillar of its corporate strategy. When asked about user protection, Pan explained that the exchange’s hot wallets and cold wallets are covered by insurance provided by Lloyds of London. Furthermore, the firm’s financials are audited by PricewaterhouseCoopers. “Our audited financials, which are publicly available, provide a transparent view of our operations and financial health,” said Pan, adding, “This audit is conducted annually.”

In spite of a scandal involving unregulated crypto exchanges JPEX and Hounax, regulated firms continue to gain momentum. After OSL and HashKey, the SFC issued further license approvals to firms such as Victory Securities. Meanwhile, HashKey Group received a $100-million Series A investment on Jan. 16, reaching unicorn status.

Related: Hong Kong’s VSFG eyes Q1 2024 for spot Bitcoin ETF introduction