HK regulator sets 50% insurance mandate for cryptocurrency exchanges
Thirteen entities are currently in the application process for virtual asset trading licences.
The Securities and Futures Commission of Hong Kong has mandated a minimum insurance requirement of 50% for licenced cryptocurrency exchanges handling customer assets.
OSL Exchange recently disclosed this requirement, emphasising that the 50% insurance coverage applies to all assets under custody.
Additionally, OSL has entered into a two-year partnership with Canopius, a syndicate underwriter at Lloyds of London, securing insurance coverage for 95% of its users' assets.
OSL and HashKey are currently the only exchanges holding virtual asset trading licences in Hong Kong since the market opened to retail investors in August. Thirteen entities are currently in the application process for such licences, subject to rigorous due diligence checks and audits.
Web3 firms are reportedly spending up to $25m on licence application preparations, with significant costs directed towards product development and team-building.