Hong Kong exchange licensing clarity attracts traditional brokerages

The SFC has granted multiple licenses since the city opened doors to retail crypto trading last August.

Less than a year after Hong Kong regulators approved crypto exchanges, traditional financial institutions and brokerages alike have been keen to obtain their digital asset licenses for trading.

In January, Chinese stock brokerage Tiger Brokers upgraded its Type 1 Hong Kong Securities & Futures Commission (SFC) to include crypto trading for professional investors and financial institutions based in Hong Kong. In an interview with Cointelegraph, John Fei Zeng, chief financial officer and director of Tiger Brokers, explained that the firm currently has 865,500 funded accounts with a combined $18.9 billion in managed assets.

“Currently, Tiger Brokers (HK) has uplifted its license to trade virtual assets for professional investor clients through a SFC-licensed virtual assets platform and will accept retail clients after SFC’s approval,” said Feng. “Residents of Hong Kong will be able to trade virtual assets such as Bitcoin and Ethereum alongside stocks, options, futures, funds, and ETFs [Through Tiger Trade].”

The firm is currently evaluating additional digital assets, such as altcoins, for listing subject to regulatory approval alongside an international expansion strategy in licensed markets such as Australia, the U.S., Singapore, Hong Kong, the U.K., and New Zealand. Feng stated:

“Other than stocks and options, crypto is becoming an important asset class. It’s hence a natural extension of business as a broker-dealer to add a new asset class, and the underlying Web3 technology is also integrated with Tiger’s fintech background.”

Similarly, last November, Hong Kong brokerage Victory Securities obtained a license from the SFC to offer crypto trading services for retail investors. “According to the company’s data, the amount of virtual asset transactions and the number of new customers in the third quarter of this year more than doubled compared with the previous quarter,” the company said. “In order to encourage new customers to choose compliant and safe virtual asset trading services, we will launch a number of trading discounts [in the future].”

Likewise, licensed Hong Kong crypto exchange OSL partnered with Interactive Brokers on Nov. 28, 2023, for the latter to open Bitcoin (BTC) and Ether (ETH) trading to retail investors through its platform. On Feb. 1, Cointelegraph reported that crypto exchange Bybit had submitted a retail trading license application in Hong Kong. Currently, Web3 firms may need to chime in as much as $25 million to invest in corporate infrastructure and compliance required for license approval. 

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