Bybit, a prominent cryptocurrency exchange, has taken a strategic step towards expanding its presence by applying for a Virtual Asset Trading Operator (VATP) license with the Hong Kong Securities and Exchange Commission (SFC). The license application, submitted on January 31 through Spark Fintech Limited, is currently under review, making Bybit one of the 14 candidates vying for the VATP license, a crucial regulatory green light for crypto exchanges operating in Hong Kong.
Hong Kong’s Regulatory Landscape and Crypto Hub Ambitions
Hong Kong’s Crypto Licensing Scene
Presently, only two crypto exchanges in Hong Kong hold licenses from the SFC. OSL exchange was licensed on December 15, 2020, and HashKey Exchange received its license on November 9, 2022. Bybit’s pursuit of the VATP license reflects the evolving dynamics of crypto regulation in the region.
VATP vs VASP License
The VATP license holds particular significance as it allows Hong Kong-based crypto firms to cater to retail customers. In contrast, the Virtual Asset Service Provider (VASP) license is more restrictive, permitting companies to serve professional investors exclusively. The latter requires investors to possess portfolios valued at a minimum of eight million Hong Kong dollars ($1.03 million) to qualify for professional investor status.
Hong Kong’s Crypto Hub Aspirations
In 2023, Hong Kong positioned itself as a crypto-friendly destination, charting a distinct course from mainland China’s stringent stance on digital assets. The SFC introduced crypto-oriented regulations that facilitated the participation of both institutional and retail investors in the crypto market.
Crypto ETF Landscape in Hong Kong
The groundwork laid by Hong Kong’s regulatory bodies became evident on December 22, when the SFC, in collaboration with the Hong Kong Monetary Authority (HKMA), signalled its readiness to receive crypto exchange-traded fund (ETF) applications. This move further solidified Hong Kong’s status as a crypto hub.
Market Developments and Future Outlook
Bybit’s Application Amidst Industry Trends: Bybit’s application aligns with the broader trend of crypto exchanges seeking regulatory approval, with OKX among the 14 candidates undergoing SFC review. As the regulatory landscape evolves, obtaining a VATP license could position Bybit strategically in Hong Kong’s growing crypto market.
Hong Kong’s Crypto ETF Environment: The region has seen an influx of futures-based crypto ETFs, exemplified by Samsung Asset Management’s launch of the Samsung Bitcoin Futures ETF in January 2023. The willingness expressed by industry players, such as Samsung Asset Management, to explore spot ETFs further underscores the maturing crypto ecosystem in Hong Kong.
In summary, Bybit’s pursuit of a VATP license marks a pivotal moment in its expansion strategy, reflecting Hong Kong’s commitment to fostering a robust and inclusive crypto market.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are subject to risk, and individuals should conduct their research.
