The Hong Kong government is actively advancing its vision to establish itself as a global digital asset hub. Since the beginning of August, an increasing number of cryptocurrency exchanges have received, or obtained in-principle approvals for, regulatory licenses. One of the most significant challenges these platforms face is opening a corporate bank account—a crucial step for enabling legal fiat deposits and withdrawals.
This guide clarifies the types of bank accounts available in Hong Kong and the differences between them, helping crypto exchanges choose and apply for the right ones based on their operational needs.
Recent Developments in Hong Kong’s Crypto Licensing Landscape
The regulatory environment for crypto businesses in Hong Kong has been evolving rapidly. Here’s a summary of recent key announcements from major industry players:
- On August 3, HashKey Group announced that its exchange officially received Type 1 and Type 7 license upgrades, making it the first licensed trading platform in Hong Kong to serve retail users.
- Also on August 3, BC Technology Group announced that its subsidiary, OSL Digital Securities Limited, received approval from the Securities and Futures Commission (SFC) to upgrade its existing license to offer digital asset trading services, including Bitcoin and Ethereum, to retail investors.
- On August 11, Hong Kong Virtual Asset Exchange (HKVAX) announced it had received an in-principle approval notice from the SFC to conduct Type 1 and Type 7 regulated activities, positioning it to become the city's third licensed virtual asset trading platform.
- On August 24, a global chief commercial officer from a major exchange indicated that their Hong Kong entity had largely completed the preliminary work for its Virtual Asset Trading Platform (VATP) license and was nearing the formal application stage.
- On August 30, the Hong Kong branch of SEBA Bank, a Swiss bank supportive of cryptocurrencies, announced it had received in-principle approval from the SFC to conduct virtual asset trading, deal in over-the-counter derivatives, provide advice on virtual assets, and manage discretionary accounts for virtual assets.
- On the same day, a Hong Kong trust service provider announced it had received a Trust or Company Service Provider (TCSP) license, allowing it to expand its fund management business operations.
- In early September, it was further reported that the license application preparation for another major exchange's Hong Kong entity was in its final stages.
This wave of institutional adoption signifies a broader shift. Many local banks in Hong Kong are now more open to engaging with virtual asset businesses, with several establishing partnerships with crypto companies. This leads to a critical operational question: what type of bank account does a crypto exchange need? 👉 Explore compliant banking solutions
Understanding the Two Key Types of Bank Accounts
For cryptocurrency exchanges operating in Hong Kong, banks typically offer two distinct types of corporate accounts. Applying for the correct one is essential, as a mistake could impact the overall licensing process.
Operating Account
The Operating Account is used for the day-to-day business expenses of the exchange itself. Crucially, this account cannot be used to handle client assets.
Its primary functions include:
- Processing payroll for employees.
- Paying for office rent and utilities.
- Managing the company's operational capital and corporate funds.
- Facilitating the hiring of necessary staff for compliance, risk, and business departments.
This account is fundamental for establishing a legitimate operational presence in Hong Kong and is often a prerequisite during the SFC license application process.
Settlement Account
The Settlement Account is specifically designed to handle client fiat money for deposits and withdrawals. This account is subject to much stricter regulatory scrutiny.
The process typically works as follows:
- The account is initially set up but remains closed or restricted.
- Once the exchange receives its "in-principle approval" from the SFC, the bank will request extensive anti-money laundering (AML) documentation.
- The bank may then open the account for testing deposit and withdrawal processes.
- Only after the exchange receives its full formal VATP license will the Settlement Account be fully activated to provide official fiat currency settlement services to its clients.
It is important to note that successfully opening either account is not guaranteed. Banks, as highly regulated institutions, conduct rigorous due diligence. Their decision depends on various factors, including the company's ultimate beneficial owners, the source of its capital, its corporate structure, and the robustness of its compliance frameworks.
Conclusion
Hong Kong's push to become a regulated digital asset center is accelerating. For Web3 companies, obtaining the right local bank account compliantly is a critical step that requires careful attention and preparation. As a key piece of the "global digital finance center" puzzle, Hong Kong's financial institutions are increasingly embracing new technologies and trends, actively supporting the development and transformation of the Web3 ecosystem.
Frequently Asked Questions
What is the main difference between an Operating and a Settlement account?
The Operating account is for a crypto exchange's internal business expenses, like payroll and rent, and cannot touch client funds. The Settlement account is exclusively for processing client fiat deposits and withdrawals and is only fully activated after a license is granted.
When should a crypto exchange apply for a bank account in Hong Kong?
It is advisable to start engaging with banks early, ideally during the SFC license pre-application phase. An Operating account can often be set up first to establish the business, while the Settlement account process runs in parallel with the licensing approval.
Can any bank in Hong Kong provide accounts for crypto businesses?
Not all banks offer these services. A growing number of traditional and virtual banks are engaging with licensed VATPs, but they carefully select their clients based on stringent risk and compliance assessments.
What documents are required for a corporate account application?
Banks typically require company registration documents, business plans, details of ultimate beneficial owners (UBOs), source of wealth verification, comprehensive AML/CFT policies, and information about the company's operational structure.
Is it possible to use an overseas corporate bank account instead?
For a crypto exchange seeking an SFC license in Hong Kong, establishing a local corporate entity and using a licensed Hong Kong bank for its Settlement account is a fundamental requirement of the regulatory framework to ensure oversight.
What happens if a bank rejects our application?
A rejection can delay operations. It's crucial to prepare a strong application with transparent documentation. Many exchanges seek professional legal and financial advisory services to navigate the process and approach the most suitable banks. 👉 Learn more about regulatory requirements