Web3 firms are spending up to $25M on HK crypto licenses – VASP expenditures are varying between 20 million to 200 million Hong Kong dollars as firms scramble to find Web3 talent for licensing.
According to a June 27 report by local news outlet Foresight News, Web3 firms in Hong Kong are spending anywhere between 20 million to 200 million Hong Kong dollars ($2.55 million to $25.5 million) for the acquisition of a Virtual Asset Licensing Regime (VASP) licenses. Sources explained:
“Since traditional financial institutions have no relevant prior infrastructure before, and have gone from 0 to 1 in various aspects such as products and teams, the cost [associated with VASPs] has been to be very high. However, even for an experienced cryptocurrency institution, the cost of obtaining a license is not cheap.”
Analysts at Foresight mentioned that Hong Kong subsidiaries of exchanges such as OKX, BitgetX, HashKey Pro, OSL, and Gate.io have already begun operations. As of June 27, OKX has since grown to 8,800 registered users in Hong Kong with a cumulative trading volume of $150 million in the Special Administrative Region (SAR) of China.
On June 1, Hong Kong unveiled new VASP licensing requirements for cryptocurrency exchanges. Among many items, firms must make proper disclosures on user statistics and company financials to the Securities and Futures Commission of Hong Kong for regulatory approval. Exchanges that do not abide by the requirements will be required to cease operations in the SAR by mid-next year.
HK moving forward. pic.twitter.com/BY4Bg6qHOu — CZ Binance (@cz_binance) June 27, 2023
The same day, the Hong Kong Virtual Asset Consortium (HKVAC) published its virtual asset index consisting of major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), alongside altcoins and privacy tokens. The new organization seeks to provide ratings services and indices to facilitate retail crypto trading in the SAR. It is supported by Huobi, Kucoin, Bitget, and others.