OSL Exchange Leads the Way
OSL Exchange, a licensed virtual asset trading platform in Hong Kong, quickly adapted to the new requirement. Through a strategic partnership, OSL now offers insurance coverage for 95% of its users’ assets, exceeding the mandated 50% minimum.
HashKey Exchange Ensures Comprehensive Protection
HashKey Exchange, another licensed cryptocurrency exchange in Hong Kong, has proactively secured its users’ assets. On November 16, 2023, the company entered into a crypto insurance agreement with OneInfinity, providing coverage ranging from $50 million to $400 million. This coverage extends beyond standard security breaches and insolvency, encompassing server downtime, data backup, and load management incidents.
This minimum insurance requirement is part of the SFC’s broader strategy to regulate the cryptocurrency industry within Hong Kong’s borders. It is worth noting that only OSL and HashKey have thus far obtained virtual asset trading licenses, while thirteen other entities are currently undergoing a comprehensive application process that includes rigorous due diligence checks and financial audits that surpass the standard proof-of-reserves.
With the surge in popularity of digital assets, ensuring the safety of customers’ funds has become a top priority.
The cryptocurrency sector in Hong Kong is rapidly evolving, with the SFC playing a crucial role in shaping the regulatory environment. While embracing digital innovation, regulators are striving to establish a robust framework that addresses potential risks and safeguards market participants.
As the regulatory landscape continues to mature, additional licensed crypto exchanges in Hong Kong may be required to meet the 50% minimum insurance requirement. This will further enhance existing security measures, creating a safer investment environment.
Ultimately, the SFC’s imposition of a 50% minimum insurance requirement establishes a clear standard for cryptocurrency exchanges in Hong Kong. OSL Exchange and HashKey Exchange have already taken steps to surpass these requirements and adequately protect their users’ assets. This demonstrates Hong Kong’s commitment to fostering a secure and regulated cryptocurrency market that thrives in the digital era. With ongoing regulatory advancements, the future of the cryptocurrency industry in Hong Kong looks promising for both investors and businesses.