SKN | Hong Kong Approves First Crypto License Since June as SFC Expands Strict Regime

Key Points:

• Hong Kong’s Securities and Futures Commission granted Victory Fintech a digital asset trading license.
• Victory is the first crypto platform approved since June, bringing the total number of licensed firms to 12.
• Hong Kong’s licensing framework remains one of the strictest among major financial jurisdictions.

Hong Kong’s top financial regulator has approved its first new crypto platform license in more than eight months, signaling continued but cautious expansion of one of the world’s most tightly controlled digital asset regimes.

The Securities and Futures Commission granted a license to Victory Fintech, also known as VDX, an affiliate of publicly listed financial services firm Victory Securities. The approval, reflected in the SFC’s registry on Friday, marks the first addition to the regulator’s crypto license list since June 17 of last year.
With Victory’s approval, the total number of licensed crypto trading platforms under Hong Kong’s framework rises to 12.

A Highly Selective Regime

Hong Kong introduced its revamped regulatory regime for virtual asset service providers in 2023, positioning itself as a global crypto hub while emphasizing investor protection and compliance.
The first platforms to secure licenses under the framework were HashKey Exchange and OSL Digital Securities, both of which operate under stringent capital, custody and risk management requirements.

The framework requires exchanges to segregate client assets, conduct robust know-your-customer checks and maintain substantial operational safeguards. It also restricts certain high-risk products and mandates ongoing regulatory oversight.
As a result, Hong Kong’s approach has earned a reputation as one of the most demanding among major financial centers.

Industry Attrition and Consolidation

The strict standards have deterred some global players. Prominent exchanges such as OKX and Bybit withdrew their license applications in May 2024, citing regulatory complexity and compliance burdens.

At the same time, the regime has attracted firms seeking regulatory credibility in Asia. Among the 12 licensed entities is Bullish, which is listed on the New York Stock Exchange and is the parent company of CoinDesk.

The slow pace of approvals reflects the SFC’s deliberate vetting process. Rather than pursuing rapid expansion, Hong Kong authorities have prioritized institutional-grade infrastructure and risk controls.

Strategic Implications

Victory Fintech’s approval suggests that Hong Kong remains committed to its crypto ambitions, even as global regulatory frameworks diverge. The city has positioned itself as a compliant gateway between East and West, particularly as mainland China maintains strict prohibitions on crypto trading.

The addition of a new licensed platform may also signal incremental confidence among regulators that the regime’s safeguards are functioning as intended. However, the modest expansion underscores that entry into Hong Kong’s market remains selective.

As other jurisdictions grapple with balancing innovation and oversight, Hong Kong’s model stands out for its emphasis on structure over speed. Whether this approach fosters sustainable growth or limits competitiveness will become clearer as global crypto markets mature.

For now, the approval of Victory Fintech marks a measured step forward in one of the industry’s most closely watched regulatory environments.