Hong Kong’s virtual asset regulatory landscape continues to evolve as major exchanges rush to secure their Virtual Asset Service Provider (VASP) licenses. Crypto.com, a leading global cryptocurrency platform, recently joined the race by submitting its application ahead of the February 29, 2024 deadline. Here’s a breakdown of the latest developments and which exchanges still need to take action.
Hong Kong’s VASP Licensing Framework
The Hong Kong government officially opened applications for VASP licenses on June 1, 2023, under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The Securities and Futures Commission (SFC) mandated that all virtual asset trading platforms must either:
- Submit their license applications by February 29, 2024, or
- Cease operations in Hong Kong by May 31, 2024.
This transitional period ensures compliance while allowing exchanges to continue serving customers during the review process.
👉 Explore how VASP licenses shape crypto regulations
Crypto.com Joins the Applicant List
On February 9, 2024, Crypto.com’s parent company, Foris DAX HK Limited, appeared on the SFC’s list of license applicants. If approved, the license will authorize Crypto.com to offer regulated crypto trading services to Hong Kong investors.
Current Status of VASP Applications
| Status | Number of Exchanges | Notable Platforms |
|---|---|---|
| Approved | 2 | HashKey Exchange, OSL Exchange |
| Under Review | 17 | OKX, Bybit, Crypto.com, HKVAX, Bullish |
| Withdrawn/Denied | 1 | Meex (application returned on Feb 7, 2024) |
Key Observations:
– Binance, HTX (formerly Huobi), and Gate.io are conspicuously absent from the SFC’s public list.
– Bitget previously announced it would not pursue a Hong Kong license.
Why This Matters for Crypto Investors
The VASP license ensures consumer protection, transparency, and compliance with anti-money laundering (AML) standards. Licensed platforms gain a competitive edge by building trust with institutional and retail investors.
👉 Learn how regulated exchanges enhance market security
FAQs About Hong Kong’s VASP License
1. What happens to exchanges that miss the application deadline?
Unlicensed platforms must exit Hong Kong by May 31, 2024. The SFC may take enforcement action against non-compliant entities.
2. Can exchanges operate while their applications are pending?
Yes, platforms that submitted applications before February 29 can continue services until the SFC approves or rejects their request.
3. Which major exchanges have not applied?
As of now, Binance, HTX, and Gate.io have not appeared on the SFC’s applicant list.
4. How long does the approval process take?
The SFC evaluates applications on a case-by-case basis, with no fixed timeline. HashKey and OSL received approvals within months.
5. What services do VASP licensees provide?
Licensed platforms can offer virtual asset trading, custody, and advisory services to Hong Kong residents.
6. Will unlicensed exchanges face penalties?
Operating without a license after May 31 may result in fines or legal action under Hong Kong law.
The Road Ahead for Crypto in Hong Kong
Hong Kong’s proactive regulatory approach positions it as a hub for compliant crypto innovation. With global players like Crypto.com and OKX seeking licenses, the region aims to balance market growth with investor safeguards.
Key Takeaways:
– Deadline-Driven Momentum: Exchanges are racing to meet regulatory requirements.
– Transparency Wins: Licensed platforms will likely dominate Hong Kong’s crypto economy.
– Investor Confidence: Regulation reduces risks associated with fraud and insolvency.
For continuous updates on Hong Kong’s crypto regulations, stay tuned to industry reports and official SFC announcements.
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