Q&A Matthew Cheung, chief strategy officer, HK’s virtual asset exchange HKVAX

By Tsering Namgyal

4 May, 2021

In this interview with Blockchain Asset Review, Matthew Cheung of HKVAX we discuss the perils and promises of starting a brand new virtual exchange in HK.

Q: You are one of the new crypto exchanges in Hong Kong. Did you already get the license from the SFC? How challenging was it to get the license?

A: Our team has been in discussion with our regulators since the very beginning, and are currently in the process of getting Type 1 & 7 licenses under the SFC.

Obviously, it has been a very fruitful but challenging process, as the expected standard from the SFC was very high, after all, getting a virtual asset license from an Asia financial hub is not something that happens everyday. Not only do we have to comply with all the existing securities and futures ordinances, we also have to include all the new virtual asset requirements.

Hopefully, we can see our full license come out this year.

Q. Who are your target clients? Do you only plan to serve institutional or retail investors at the same time?

A: At least for the first 18 months, we will focus primarily on institutional clients, or PI (Professional Investors) the term that is used in Hong Kong. The problem that we are solving, is essentially providing a fully regulated and compliant venue for institutional clients to trade while minimizing their risks to trade or hold custody of their assets on unregulated platforms.

Q. What is the biggest challenge of running a virtual asset exchange in a place like HK?

A: Trying something new in a well-developed economy is never easy, as “Trying” usually entails potential error (trial & error). In an extremely mature market, errors are usually strictly prohibited. Hopefully, our audiences are more accepting to new things or new changes, giving us opportunities to grow and build better products, without having the unrealistic expectation that everything has to be perfect on Day One.

Q. Is complying with the KYC and AML requirements difficult?

A: It is not easy, after all, the existing compliance framework in traditional finance was not built for virtual assets. So we had to finetune a lot of measurements specifically for crypto, to ensure that our platform is fully compliant and that we provide the highest level of customer protection.

Q. What is the future of the crypto industry in HK and also in the rest of places like China?

A. As one of the largest financial hubs in the world, inevitably, crypto will become extremely popular in Hong Kong. Gathering interests from both retail and professional traders. Though we can only offer our services to professional investors at the moment, we look forward to offering the same level of security measurements and investor protections to retail clients in the future.

Photo courtesy HKVAX

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