Hong Kong crypto exchange license applications cost less than expected: Report

All unlicensed crypto exchanges have been kicked out of Hong Kong.

It turns out Hong Kong crypto exchange licenses are costing applicants several millions out of pocket, far below the $25 million witnessed a year ago. 

In an interview with the Financial Times, Livio Wang, chief operating officer of HashKey Group, said that the crypto exchange licenses are “not necessarily tens of millions of dollars, but certainly tens of millions of Hong Kong dollars [several million in USD].” He explained that “the costs corresponding to the stage of preparing license review materials are different from those of the operation stage.” He further stated: 

“For HashKey, which is already in operation, our investment in the entire exchange sector is indeed tens of millions of dollars, but it is not expected to be so much for a platform that is still in the licensing stage.”

Since June 1, Hong Kong regulators have kicked out all unlicensed crypto exchanges in the East Asian city, with the penalty of criminal charges for noncompliance. Currently, there are more than 11 firms with the “deemed to be licensed” designation. As of last year, there are only two fully licensed exchanges: HashKey and OSL. 

Wang revealed during the interview that since its launch, HashKey Exchange now manages $500 million in user assets and has facilitated $440 billion in cumulative trades. “Our number of activated customers this week exceeded last week by 267%, and the number of newly activated customers more than tripled,” the blockchain executive stated.

In April, HashKey followed the example of Coinbase in setting up a global exchange based in Bermuda for international users. Unlike its Hong Kong-based counterpart, which was the first to win a license to operate in the region, HashKey Global won’t serve Hong Kong, China, the United States and a host of other regions

The rollout of Hong Kong’s exchange licensing regime was stunted last year when, despite existing rules, an unlicensed crypto exchange, JPEX, managed to swindle investors out of $166 million before collapsing in September 2023. Since then, residents have become more skeptical of crypto investing. 

Related: Mt. Gox not dumping Bitcoin just yet, Hong Kong boots out crypto exchanges