August 3 marked a watershed moment as Hong Kong’s Securities and Futures Commission (SFC) granted HashKey Exchange the first retail virtual asset trading license, signaling a transformative shift toward global cryptocurrency regulation.
The Evolution of Crypto Regulation
The crypto industry has navigated a turbulent journey since 2018, when stringent global regulations dominated the narrative. High-profile collapses like FTX, Three Arrows Capital, and Terra Luna exposed systemic vulnerabilities, underscoring the urgent need for compliance frameworks. Bitcoin’s resilience amid these challenges highlights its enduring value—and the industry’s potential for maturation.
👉 Explore how top exchanges are adapting to new regulations
The U.S. Regulatory Crossroads
Recent U.S. enforcement actions against Binance and Coinbase reflect the complexities of regulating decentralized technologies. The SEC and CFTC’s jurisdictional tug-of-war has left exchanges grappling with ambiguous guidelines, escalating costs, and operational hurdles. Meanwhile, other financial hubs—notably Hong Kong—are seizing the opportunity to lead in regulatory clarity.
Hong Kong’s Strategic Move
Hong Kong’s Virtual Asset Service Provider (VASP) regime, effective June 1, 2023, established a rigorous licensing framework, positioning the city as a global Web3 policy pioneer. The SFC’s approval of HashKey’s upgraded license further solidifies this advantage, attracting institutional and retail investors alike.
Interview with Livio Weng, COO of HashKey Group
36Kr: Congratulations on the license. Was this timeline expected?
Livio Weng: We anticipated it. Our application was submitted on June 1, with continuous SFC engagement. While the outcome was planned, timing involved some serendipity.
36Kr: How did HashKey prepare for compliance early?
Weng: We began in 2019, securing professional investor licenses (Types 1 & 7) by late 2022. Many peers withdrew due to uncertainty, but our team’s strategic foresight—guided by Chairman Xiao Feng—kept us focused on Hong Kong’s potential.
36Kr: What were SFC’s key criteria?
Weng: System stability, user safeguards, internal governance, and risk controls. The process was stringent yet efficient.
Retail vs. Institutional: Key Challenges
“Retail investors are the lifeblood of crypto,” Weng noted. Unlike institutional clients,散户 demand seamless UX and ironclad security. HashKey’s whitepaper-tier safeguards include:
- 98% cold wallet storage, with 2% in insured hot wallets.
- Bank-grade KYC across 16 jurisdictions.
- No leverage/derivatives to mitigate risk.
👉 Discover how cold wallets enhance asset security
Banking Partnerships: A Compliance Advantage
As a licensed entity, HashKey enjoys privileged access to banking channels—a hurdle for unregulated platforms. Collaborations with ZA Bank and others ensure fiat liquidity, a critical edge in attracting mainstream users.
Hong Kong’s Web3 Ambitions
36Kr: Why is Hong Kong ideal for crypto?
Weng: Its proximity to mainland talent pools, robust financial infrastructure, and progressive policies create a unique ecosystem. Traditional finance frameworks (e.g., securities-style risk ratings) lend credibility to crypto regulation.
36Kr: What’s next for Hong Kong’s economy?
Weng: Web3 and AI are pivotal to its reinvention. While AI boosts productivity, Web3 redefines ownership and trust—a synergy that could reshape sectors like元宇宙 (metaverse).
Misconceptions and Market Education
Public skepticism stems from past scams and volatility. Licensed exchanges must educate users while debunking myths (e.g., crypto ≠ gambling). HashKey strictly prohibits mainland China retail operations, aligning with local laws.
Competitive Landscape
With OSL also licensed, Hong Kong may see a “big three” dynamic akin to Upbit (Korea) or Coinbase (U.S.). HashKey’s differentiators:
- First-mover compliance lead.
- Web3-finance hybrid expertise.
- Rapid retail product rollout (app in final testing).
Growth Targets
- 2023: 50K–100K registered users.
- 2025: 10M+ users, aiming for global top-tier status in合规赛道.
FAQ Section
Q: How does HashKey protect user assets?
A: Military-grade冷钱包 storage, independent audits by Big Four firms, and full insurance coverage for hot wallets.
Q: Can mainland Chinese users trade on HashKey?
A: No. HashKey complies with local laws and bans retail services for mainland散户.
Q: What’s Hong Kong’s regulatory edge?
A: “原生式监管” (native-style rules) clarify asset custody, trading limits, and operational boundaries upfront—unlike the U.S.’s reactive approach.
Q: Will AI replace Web3?
A: No. AI enhances生产力 (productivity), while Web3 transforms生产关系 (production relations)—both are complementary.
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