OSL, a subsidiary of Fidelity-backed BC Group, is close to receiving a license towards offering automated digital asset trading services under Hong Kong’s Securities and Futures Commission (SFC) which was introduced in November 2019.
Preliminary approval is pushing cryptocurrency company OSL Digital Securities to become one of the first exchanges to receive a license under the virtual asset regime SFC. This new development was revealed in an exchange filing on August 21, as markets regulator in Hong Kong has agreed in principle to issue a license to the company.
The company claimed in November 2019 that it was the first to apply for a digital asset license from Hong Kong’s Securities and Futures Commission (SFC) under new rules which allow cryptocurrency exchanges to opt into regulation. However, it seems it is the only company to have applied for such approval.
There have been debates by financial regulators world over about whether and how the cryptocurrency or virtual asset industry should be regulated. Interestingly, OSL as well as some of its competitors are interested in regulation because it will ease the provision of services to financial institutions who wish to trade cryptocurrencies.
According to the CEO of BC Group, Hugh Madden, a merit of receiving license is the possibility of regulated institutions to limit their risk by their ability to engage with other regulated entities.
However, as stated in the filing, there are certain conditions to be met for final approval but they did not reveal them. In the words of Madden, these are expected from a conservative regulator in a financial hub.
Across Asia, other regulators are likewise considering regulation of cryptocurrency firms. In Singapore, authorities are about to bring in licensing for digital asset firms, and some exchanges prefer it to Hong Kong due to less prescriptive rules. In Japan, some cryptocurrency exchanges have been licensed.