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Virtual Asset Trading Platform License Applications in Hong Kong
The recent deadline for virtual asset trading platform (VATP) crypto license applications in Hong Kong has passed, with a total of 24 applicants. This number is notably lower than the 70 applicants in a similar scheme in Singapore.
Application Deadline and Requirements
At least five cryptocurrency firms submitted their applications just before the February 29 deadline, according to a report from the South China Morning Post. Cryptocurrency exchanges that missed the deadline must exit the Hong Kong market by May 31.
Approval Process and Timeline
The Securities and Futures Commission (SFC) will publicly announce approved and declined applications by June 1, 2024. Once approved, virtual asset trading platforms can begin onboarding new retail and institutional crypto investors and commence marketing activities in Hong Kong.
Major Exchanges and Applications
Several major crypto exchanges with connections to mainland China or Hong Kong have either directly applied for licenses or done so through their affiliates. Notable examples include HBGL Hong Kong (affiliated with HTX), HKVAEX (affiliated with Binance), and OKX.
Approved and Rejected Applications
Currently, OSL and HashKey are the only licensed exchanges serving retail investors. The SFC has also released a list of applications that have been withdrawn or rejected, including those from Ammbr HK Limited, BitHarbour HK Limited, Meex Digital Securities Limited, and HBGL HK Limited.
Regulatory Concerns and Market Competitiveness
There are concerns about the stringent requirements for the registration process in Hong Kong, potentially impacting market competitiveness. The high costs associated with the licensing process differentiate it from Singapore, with estimates exceeding HK$60 million (US$7.7 million).
Former regulators have noted that the lower number of applicants in Hong Kong may be due to these strict requirements. Additionally, there is worry that Hong Kong’s regulations could limit the global competitiveness of crypto companies using the city as a base of operations.
Hong Kong also aims to regulate tokenized securities and stablecoins as part of its broader Web3 initiatives, while exploring the concept of a digital Hong Kong dollar. In comparison, Singapore’s more streamlined process resulted in a higher number of official license applications in a shorter timeframe.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
