Interview with Frank Zhang, Director of OKX Hong Kong: Why Compliance Is Key to Web3’s Future

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The Hong Kong Special Administrative Region is rapidly emerging as a leading hub for Web3 and virtual asset innovation. With recent developments in spot crypto trading and the filing of Bitcoin ETF applications, the region’s regulatory clarity has sparked renewed interest among global digital asset platforms.

In early February, the Securities and Futures Commission (SFC) of Hong Kong mandated that all unlicensed virtual asset trading platforms (VATPs) either submit a formal license application by February 29 or cease operations by May 31. This regulatory deadline has set a clear path forward for compliant market participants. Currently, 14 major platforms—including OKX Hong Kong, Bybit, and HKVAEX—are undergoing review for their Virtual Asset Service Provider (VASP) licenses.

During the 2024 Hong Kong Web3 Festival, we sat down with Frank Zhang, Executive Director of OKX Hong Kong, to discuss the platform’s progress toward full compliance, its strategic preparations, and the broader implications for the future of digital finance in Asia.

OKX Hong Kong’s Path to Regulatory Compliance

Q: OKX Hong Kong has been actively pursuing a VATP license. Can you share any updates on the application status and timeline for approval?

Frank Zhang: We officially submitted our VATP license application in November 2023, and this information is publicly available on the SFC’s official website. Investors and users can track the status of all pending applications, licensed platforms, and withdrawn filings directly through the SFC’s Virtual Asset Platform Portal. The commission also regularly publishes updated guidance and investor alerts, which we strongly recommend following for anyone engaged in the digital asset space.

Transparency is one of the SFC’s greatest strengths—it allows both businesses and users to make informed decisions. For OKX Hong Kong, this process isn’t just about ticking regulatory boxes; it’s about building long-term trust.

👉 Discover how leading platforms are navigating global compliance standards today.

Building a Compliant and User-Centric Platform

Q: What specific steps has OKX Hong Kong taken to meet Hong Kong’s regulatory requirements? What are the core compliance pillars for operating a virtual asset exchange here?

Frank Zhang: We’re deeply appreciative of the clear and comprehensive framework provided by the Hong Kong government and the SFC. The guidelines cover critical areas such as Know Your Customer (KYC), Anti-Money Laundering (AML), cybersecurity, custody solutions, and the Travel Rule—all with detailed expectations that help shape our internal processes.

For us, compliance goes beyond regulatory obligation. It’s an opportunity to refine our platform. As we align with local standards, we’re simultaneously enhancing user experience—improving security protocols, streamlining verification, and introducing more transparent risk disclosures.

This dual focus ensures that while we meet regulatory benchmarks, we also deliver a safer, more intuitive trading environment. Ultimately, a well-regulated market helps educate users on how to identify trustworthy platforms, strengthening public confidence in the entire digital asset ecosystem.

Supporting Hong Kong’s Stablecoin and CBDC Innovation

Q: Is OKX Hong Kong planning to participate in Hong Kong’s Web3 financial infrastructure development—such as the proposed Hong Kong dollar-pegged stablecoin or central bank digital currency (CBDC)?

Frank Zhang: The government’s announcement of a stablecoin sandbox initiative in early March was a significant milestone. From our perspective, this structured yet flexible approach allows innovators to collaborate with regulators in a controlled environment. That kind of public-private partnership accelerates responsible innovation.

Meeting regulatory standards isn’t simple—it requires technical precision, legal rigor, and financial integrity. The sandbox model enables platforms like ours to explore use cases, test integrations, and co-develop solutions with other stakeholders under regulatory supervision.

As a digital asset exchange, OKX Hong Kong is focused on supporting the broader stablecoin ecosystem—whether through liquidity provision, trading pairs, or user education. We believe stablecoins will play a pivotal role in bridging traditional finance and decentralized systems.

👉 Explore how next-generation financial infrastructure is being built in regulated markets.

The Broader Impact of Regulatory Approval

Q: What impact do you expect if OKX Hong Kong successfully obtains its license? How might this influence the wider industry?

Frank Zhang: A licensed OKX Hong Kong would send a powerful signal: that global platforms are committed to operating transparently and securely within regulated jurisdictions. Our core mission has always been to make digital assets accessible, fair, and safe for everyone.

Regulatory compliance directly addresses one of users’ biggest concerns—asset security. When users know their platform adheres to strict custody rules, undergoes regular audits, and follows AML protocols, their confidence grows. This trust is essential for mass adoption.

Compliance isn’t just a checkbox for OKX—it’s embedded in our global strategy. Whether in Europe, the Middle East, or Asia, we’re committed to working within local frameworks to ensure platform reliability and user protection.

Bitcoin ETFs and the Evolution of Mature Markets

Q: Bitcoin ETFs have been a major driver in this market cycle. Do you believe they will extend the duration of the current bull run?

Frank Zhang: Absolutely. ETFs are among the most established financial instruments in traditional markets—especially in the U.S. and Hong Kong. When applied to digital assets, they offer a regulated gateway for institutional and retail investors who may be new to crypto.

Bitcoin ETFs lower the entry barrier. Instead of navigating wallets, private keys, or exchanges, investors can gain exposure through familiar brokerage accounts. This convenience brings new capital into the ecosystem while educating a broader audience about blockchain technology.

Moreover, ETFs add structural depth to the market—increasing liquidity, reducing volatility over time, and encouraging further product innovation. In that sense, they’re not just a trend; they’re a foundational step toward a mature digital asset economy.

Frequently Asked Questions (FAQ)

Q: What is a VATP license in Hong Kong?
A: A Virtual Asset Trading Platform (VATP) license is issued by the SFC to regulate crypto exchanges operating in Hong Kong. It ensures platforms meet strict standards for investor protection, cybersecurity, and financial integrity.

Q: How many crypto exchanges are currently licensed in Hong Kong?
A: As of mid-2025, only a few platforms have received full licenses. Several others, including OKX Hong Kong, are in the application review process.

Q: Why is Hong Kong becoming a crypto hub?
A: Thanks to clear regulations, government support for Web3 innovation, and its position as a global financial center, Hong Kong offers a balanced environment for compliant crypto growth.

Q: What is the Travel Rule in crypto regulation?
A: The Travel Rule requires virtual asset service providers to share sender and recipient information during transactions above a certain threshold—similar to traditional banking anti-money laundering rules.

Q: Can mainland Chinese users access OKX Hong Kong services?
A: No. OKX Hong Kong complies with local regulations and does not serve residents of mainland China.

Q: What role do stablecoins play in Web3 finance?
A: Stablecoins provide price stability, enable cross-border payments, support DeFi applications, and act as a bridge between fiat and digital economies.

👉 Learn how compliant platforms are shaping the future of digital finance.

Final Thoughts: A Vision for Secure and Inclusive Finance

The journey toward full compliance is complex—but necessary. For OKX Hong Kong, it represents more than regulatory alignment; it reflects a deeper commitment to security, transparency, and user empowerment.

As Hong Kong continues to refine its Web3 policies—from ETF approvals to stablecoin sandboxes—the region is setting a benchmark for responsible innovation. Platforms that embrace these standards won’t just survive; they’ll lead the next phase of digital finance.

By combining global expertise with local compliance rigor, OKX Hong Kong aims to be at the forefront of this transformation—delivering secure, innovative services that align with both user needs and regulatory expectations.

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