Several Hong Kong Local Brokerages Have Upgraded to Type 1 License, Paving the Way for More Institutions to Enter the Cryptocurrency Market

According to a report by Jinse Finance, industry insiders directly involved in virtual asset license applications and system integration have revealed that several local Hong Kong brokerages—such as Victory Securities (08540.HK) and Eddid Securities—have already completed their Type 1 license upgrades. Guotai Junan International is not the only mainland-backed brokerage applying for a license, and more institutions may enter the market in the future. The main business of these brokerages is to provide “distribution” type trading services, rather than operating proprietary exchanges. Specifically, their model involves setting up omnibus accounts within licensed exchanges and connecting to trading systems to offer clients compliant trading channels for mainstream cryptocurrencies such as BTC and ETH, without involving high-risk altcoins or so-called “air coins.” At present, these local brokerages have already launched similar distribution services, and their compliance requirements for client due diligence (KYC), suitability management, and investor education are largely consistent with those of Guotai Junan International. All of them prohibit mainland Chinese residents from participating in trading.