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When Hong Kong regulators gave crypto firm OSL a nod of approval last week, it was the icing on the cake for the HKEX-listed digital asset trading platform.
Hong Kong’s Securities and Futures Commission (SFC) granted BC Group crypto subsidiary OSL an “approval-in-principle” for its license application for Type 1 (dealing in securities) and Type 7 (automated trading service or ATS), as it pertains to crypto and virtual assets.
The bigger picture is that Asian crypto hubs like Hong Kong, Singapore and Japan have a clearer regulatory stance going forward and are progressing faster than the U.S. and Europe. Perhaps this should be expected, given that Asia remains the global leader in terms of crypto trading volumes.
Related: Hong Kong Regulator Gives Crypto Exchange OSL Tentative Licensure Approval
“I think regulatory progress has been so much more significant than in North America,” OSL CEO Wayne Trench said in an interview. “You’ve got regulators who’ve been front-foot trying to embrace this movement and embrace the technology. The West is perhaps slightly less developed with more obscurity or uncertainty, which just really makes it difficult right for the traditional institutions to engage.”
Read more: Hong Kong Regulator Gives Crypto Exchange OSL Tentative Licensure Approval
This is not to say Hong Kong is delivering light-touch regulation when it comes to virtual assets; quite the opposite, said BC Group CEO Hugh Madden.
“The SFC flies very carefully and is heavily focused on consumer protection,” Madden said. “If you look at the details of the SFC’s licensing framework, it’s quite specific. They prescribed mandatory insurance to protect consumers with specific percentages for hot and cold storage. When you add in the levels of controls, capital and scale of your organization, it’s really quite a tough hurdle.”
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The SFC did not respond to a request for comment by press time.
OSL, which states it is the first crypto company to be granted provisional approval by the SFC, has acquired insurance cover for both hot (connected to the internet) and cold (fully offline) storage of digital assets but declined to go into details of the size of cover or markets providing it. OSL is also set apart from other crypto plays in that it’s audited by Big Four accounting firm PwC.
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In terms of timelines, Madden said if all the SFC’s supervisory requirements are met, OSL should have its full license by the end of this year.