February 5, 2024
By Sharan Kaur Phillora
In a strategic move to expand its presence in the burgeoning cryptocurrency market of Hong Kong, Bybit, a leading cryptocurrency exchange, has officially applied for a Virtual Asset Trading Operator (VATP) license. The application, submitted on January 31st through Spark Fintech Limited, marks Bybit’s ambitious endeavor to cater to the retail sector within Hong Kong’s dynamic financial landscape.
Here’s what we know:
The Hong Kong Securities and Exchange Commission (SFC), currently reviewing 14 similar applications, including one from crypto exchange OKX, has granted VATP licenses to only two exchanges: OSL Exchange and HashKey Exchange. These licenses are pivotal, enabling firms to serve a broader customer base, including retail investors, unlike the Virtual Asset Service Provider (VASP) license, which is restricted to professional investors with portfolios of at least eight million Hong Kong dollars ($1.03 million).
Hong Kong’s welcoming regulatory stance towards cryptocurrencies has positioned it as a magnet for crypto enterprises, starkly contrasting mainland China’s stringent digital asset policies.
In 2023, the SFC introduced comprehensive regulations tailored to the crypto sector, facilitating participation from both institutional and retail investors. This progressive approach underscores Hong Kong’s commitment to becoming a global crypto hub.
The anticipation for crypto exchange-traded funds (ETFs) in Hong Kong reached new heights on December 22, when the SFC, alongside the Hong Kong Monetary Authority (HKMA), signaled their readiness to entertain ETF applications. This development has paved the way for financial institutions like Samsung Asset Management, which launched the Samsung Bitcoin Futures ETF in January 2023, to consider expanding into spot ETFs.
Bybit’s foray into the Hong Kong market with a VATP license application is a testament to the city-state’s allure as a crypto-friendly jurisdiction. As the SFC continues to process the burgeoning queue of applications, the crypto landscape in Hong Kong is poised for significant growth, potentially setting new benchmarks for the global cryptocurrency ecosystem.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
