Hong Kong’s SFC also suggests eleven VATPs to acquire official permission, a year after the rules of the city that aim to foster the emerging crypto market.

Licensing and Regulatory Compliance for VATPs

Other applicants close to getting the licenses include such familiar sites as Crypto.com and Bullish, which are stated as “deemed to be licensed” in the SFC’s latest report. Considered to be among the largest in terms of the global trading structure, these platforms are gradually aligning to operate only under Hong Kong legislation.

However, not all major players have been keen to get the licensing in Hong Kong. Although the largest exchange globally, Binance, did not apply, others on this list, such as OKX and Bybit, have withdrawn their applications. Similarly, American-headquartered websites like Coinbase Global and Kraken have consciously avoided licenses as well.

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The SFC has laid down June 1 as the date by which one has to either secure a license to operate an exchange or establish its eligibility. They should at least be categorized as ‘deemed to be licensed’ if they are to be allowed to continue operations and tap local investors. Full licenses will be granted after the SFC affirms that the rules have been met continuously.

In late 2022, Hong Kong began its process toward advancing in the virtual asset business as part of an initiative to rebuild it into an international financial hub. Actions to attract the crypto business in the city include the expansion of the list of allowed exchanges, the approval of Bitcoin spot and Ethereum ETFs, the development of stablecoin regulation, and the establishment of a framework for the tokenization of bonds.

Competing with other countries like Dubai and Singapore for the title of the leading hub of digital assets, Hong Kong saw approximately twenty-two companies submit applications before the February 29 deadline, seeking licenses for a crypto exchange. As of now, only two companies in Hong Kong have been awarded a full VATP license: OSL Group and HashKey Exchange.