Hong Kong’s Securities and Futures Commission (SFC) is ramping up efforts to solidify the city’s status as a global crypto hub by expanding its crypto regulation team. The move is part of a broader initiative to enhance market surveillance, expedite exchange approvals, and strengthen enforcement in the cryptocurrency sector.
In its budget proposal for the 2025-2026 fiscal year, the SFC is seeking to add 15 new staff members, with eight specifically dedicated to regulating virtual asset trading platforms (VATPs). This marks a significant increase in manpower aimed at improving the oversight of the growing crypto market.
The proposed budget, presented to the Legislative Council on February 3, sets the SFC’s recurrent expenditure at HK$2.59 billion (approximately $332.4 million), reflecting a 7.2% rise from the previous year. A key component of this increase, amounting to HK$130.5 million ($16.7 million), will go towards higher staff costs, including a 2.1% average salary hike.
The need for additional staff stems from the SFC’s acknowledgment that its current workforce, although experienced, has struggled to meet its inspection targets. In 2023, the regulator fell short of its goal to conduct 300 on-site inspections, completing only 200. The new hires are expected to address this gap and help the SFC better supervise the crypto landscape in Hong Kong.
Speeding Up Licensing Process
As part of its effort to become an attractive yet well-regulated destination for crypto businesses, Hong Kong launched its licensing regime for VATPs in June 2023. The framework allows approved exchanges to cater to retail investors, marking a shift from the city’s previous policy, which mostly restricted crypto access to institutional players.
Since the launch of the licensing regime, the SFC has been working closely with crypto platforms to accelerate the licensing process. The regulator’s proactive engagement with VATP executives is designed to streamline approvals while reinforcing compliance expectations.
This initiative is already showing results. On January 27, 2025, the SFC issued its first two licenses of the year, granting PantherTrade and YAX approval to operate as licensed crypto exchanges. This brings the total number of licensed VATPs in Hong Kong to nine, including prominent exchanges like OSL and HashKey.
With its expanded team and more efficient licensing process, the SFC aims to strengthen its oversight of the crypto sector and further solidify Hong Kong’s position as a leading hub for digital asset businesses.