"SFC Bolsters Crypto Oversight: 15 New Staff, 8 Dedicated to Virtual Assets"

The Securities and Futures Commission (SFC) of Hong Kong is bolstering its oversight of the cryptocurrency sector by expanding its staff. The regulator aims to enhance market surveillance, expedite exchange approvals, and strengthen enforcement efforts. In its budget plan for the 2025-26 financial year, the SFC proposed hiring 15 new staff members, with eight dedicated to virtual asset regulation. This move comes as Hong Kong seeks to solidify its position as a global crypto hub.

The SFC's budget proposal, presented at a Legislative Council meeting on Feb. 3, projects recurrent expenditure to reach HK$2.59 billion ($332.4 million) for the next fiscal year, an increase of 7.2% from the previous year's forecast. A significant portion of this growth, HK$130.5 million ($16.7 million), is attributed to higher staff costs, including an average salary increase of 2.1%.

The additional hires are seen as necessary after the SFC acknowledged that its existing staff, while experienced, struggled to meet inspection targets. In 2023, the regulator conducted only 200 on-site inspections of licensed financial firms, falling short of its goal of 300. With the new personnel, the SFC seeks to address this shortfall and improve its supervision of Hong Kong's crypto ecosystem.

Hong Kong has been actively positioning itself as a regulated yet attractive destination for crypto businesses. In June 2023, the city launched its licensing regime for Virtual Asset Trading Platforms (VATPs), allowing approved exchanges to serve retail investors under a structured framework. This shift marked a turning point, as Hong Kong moved away from its previous stance that largely limited crypto access to institutional players.

Since then, the government has been refining its regulatory approach, including advancing a proposed stablecoin oversight framework. The SFC has been actively engaging with trading platforms to speed up the licensing process. In a January statement, the commission stated its close collaboration with VATP executives, which has helped to accelerate approvals while reinforcing compliance expectations.

The results of this push are becoming evident. On Jan. 27, the SFC issued its first two licenses of 2025, approving PantherTrade and YAX as licensed crypto exchanges. This brought the total number of licensed VATPs in Hong Kong to nine, including