Hong Kong Regulator Gives Crypto Exchange OSL Tentative Licensure Approval

Hong Kong may soon have its first fully licensed cryptocurrency exchange: OSL Digital Securities, which on Friday received a landmark approval-in-principal from the Securities and Futures Commission (SFC).

Preliminary approval pushes OSL, a subsidiary of Fidelity-backed BC Group, closer to becoming one of the first exchanges licensed to offer automated digital asset trading services under the virtual asset regime SFC unveiled last November.

Full licensure is contingent on OSL satisfying undisclosed conditions, according to Reuters. But OSL is well positioned; it was the first exchange to apply for the license and appears to be the only one this far along.

SFC is one of a handful of regional regulators beefing up its virtual asset oversight in response to anti-money-laundering (AML) and know-your-customer (KYC) concerns.

The watchdog's approach to crypto now treats virtual asset exchanges much like traditional securities brokerages in terms of oversight. It is, however, an "opt-in" system.