Hong Kong: Blockchain Firm SlowMist Conducts Security Audits for HashKey Pro Exchange, Other Crypto Platforms

During the 2019 Fintech Week, the Hong Kong Securities and Futures Commission (HKSFC) reportedly demonstrated a stern regulatory stance towards cryptocurrency through its publications “Position Paper: Regulation of Virtual Asset Trading Platforms” and “Warning on Virtual Asset Futures Contracts,” emphasizing strict licensure and professional investor services only.

On October 31, 2022, during the Hong Kong Fintech Week, the Hong Kong Special Administrative Region government “articulated its policy stance and guidelines to foster a vibrant virtual asset industry and ecosystem in the region” through a “Policy Statement on the Development of Virtual Assets in Hong Kong,” solidifying its ambition to become a global hub for virtual assets.

On May 23, 2023, HKSFC unveiled a “Consultation Conclusions on Proposed Regulatory Framework for Licensed Virtual Asset Trading Platform Operators,” which concluded on March 31 with 152 submissions “from industry and professional entities, consulting firms, market participants, licensed corporations, individuals, and other stakeholders.”

The feedback widely supported “the proposed regulatory framework for licensed virtual asset trading platforms,” leading to HKSFC’s decision to implement “Guidelines for Virtual Asset Trading Platforms” and “Anti-Money Laundering Guidelines,” with certain amendments and clarifications as outlined in the consultation document, effective June 1.

As of June 1, 2023, with the implementation of new virtual asset policies in Hong Kong, retail investors are now anticipated “to purchase cryptocurrencies such as Bitcoin on licensed and compliant trading platforms.”

Up until now, two cryptocurrency firms have acquired licenses for compliant trading within Hong Kong, namely BC Technology’s OSL Exchange and HashKey’s HashKey Pro Exchange.

OSL Exchange stands as “a strategic partner to SlowMist, while HashKey Pro Exchange has enjoyed a long-term collaboration with SlowMist.”

With great honor, SlowMist conducted comprehensive security audits and assessments for HashKey Pro Exchange, and “the compliance security audit report issued by SlowMist has been recognized by HKSFC.”

The SlowMist security team has “served several cryptocurrency trading platforms in Hong Kong applying for licenses, including the already-licensed HashKey Pro, HKBGE in the licensing process, and MEEX planning to apply.”

Tracing back, since its inception, SlowMist has “provided compliance security audit reports to numerous cryptocurrency trading platforms, earning regulatory approvals:”

In 2023, a report for HashKey Pro was submitted to HKSFC, “securing a license.
Continuous compliance is an ongoing journey.”

Following the HKSFC’s latest requirements and the international OWASP standards, SlowMist has organized “a checklist for HKSFC-compliant security audits.”

By deeply analyzing HKSFC’s circulars and guidelines and leveraging years of blockchain security experience, SlowMist has developed “a HKSFC-compliant security audit framework, also aligning with OWASP international standards for Web, iOS, and Android, ensuring project compliance with HKSFC while adapting to OWASP standards,” encompassing:

With the new virtual asset policies, the blockchain sector “embraces fresh opportunities, marking Web3 industry as the innovation frontier for entrepreneurs and builders.”

To safeguard user assets, rights, and market stability, compliance is “an inevitable trend, with regulatory oversight on the cryptocurrency industry maturing.”

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