After months of regulation and preparation, Hong Kong has given its first crypto exchange the greenlight to operate. This is a major milestone for the cryptocurrency industry in the region, as it paves the way for more exchanges to set up shop.

Hong Kong Greenlights Crypto Exchange

The Hong Kong Securities and Futures Commission (SFC) approved the first cryptocurrency exchange for crypto trading, invest HK announced on Monday. This marks the first time a cryptocurrency exchange has officially been approved by the SFC, a regulatory body in Hong Kong. The exchange, OSL, is a part of the BC Group, a financial institution operating in the city since 2000.

The exchange was granted approval to operate in the city under the regulatory sandbox framework, which is designed to provide regulatory oversight while allowing new businesses to experiment with new models and technologies. OSL has been in the sandbox since 2017, and the SFC granted the exchange’s license in June 2020.

This approval is a major milestone for the cryptocurrency industry in Hong Kong, and it is a sign that the city is embracing the new technology. The city has a long history as a hub for financial services, and this approval is a sign that it is looking to become a leader in the cryptocurrency space as well.

Regulation Precedes Exchange Licensing

Before receiving the greenlight to operate, OSL had to work extensively with the SFC to ensure that it was compliant with all regulation. This included a lengthy process of filing paperwork, presenting proposals, and, most importantly, demonstrating how it could protect investors from financial harm.

The SFC ensured that OSL had sufficient measures in place to protect customers’ assets from theft, fraud, and other risks associated with crypto trading. OSL also had to demonstrate a sound understanding of the technology, which included a thorough review of the exchange’s customer onboarding process, trading rules, and compliance procedures.

The approval of OSL is a testament to the SFC’s willingness to embrace cryptocurrency and its potential. The regulator has been working on a regulatory framework for cryptocurrency exchanges for some time now, and the approval of OSL is the first major step in the process.