Hong Kong officially opened applications for Virtual Asset Service Provider (VASP) licenses in June last year, establishing a regulatory framework for cryptocurrency exchanges operating within the region. This move aims to bring clarity and security to the digital asset market, protecting investors while fostering innovation. With the application deadline of February 29 fast approaching, many prominent exchanges have stepped forward to submit their paperwork.
Crypto.com is among the latest to apply, joining a growing list of platforms seeking official approval. The exchange, operating under the company name "Foris DAX HK Limited," submitted its application on February 9, as shown on the public list maintained by the Securities and Futures Commission (SFC) of Hong Kong. If approved, the license will allow Crypto.com to offer virtual asset trading services to Hong Kong investors in full compliance with local regulations.
Current Status of VASP License Applications
The SFC has been actively reviewing applications, with a clear set of guidelines and deadlines for all market participants.
Approved and Pending Applications
To date, two exchanges have successfully obtained their VASP licenses: HashKey Exchange and OSL Exchange. These two platforms are now fully licensed and operational under the new regulatory regime.
Another 17 companies are currently under review. Among those awaiting approval, several notable names stand out:
- OKX
- Bybit
- Panther Trade (猎豹交易有限公司)
- BGE
- HKbitEX (香港数字资产交易集团有限公司)
- HKVAX (香港虚拟资产交易所有限公司)
- VDX (胜利数码科技有限公司)
In a recent flurry of activity, bitV, YAX, and Bullish also submitted their applications in February, just before the deadline.
Notable Exchanges Yet to Apply
The absence of certain major global exchanges from the SFC's public list is conspicuous. Platforms such as Binance, HTX (formerly Huobi), and Gate.io, which had been rumored to be considering action, have not yet applied for the license. Furthermore, the application for the platform Meex, which was listed in December, was officially returned on February 7. Bitget has explicitly stated it will forgo applying for a Hong Kong license.
Understanding the VASP Transition Period
The SFC has designated the period from June 1, 2023, to May 31, 2024, as a transition phase for license applications. This provides a pathway for existing platforms to continue operations while their applications are processed.
Under the "deemed-to-be-licensed" arrangement, an existing virtual asset trading platform will be automatically considered licensed starting June 1, 2024, provided the SFC determines it meets the necessary conditions. This status will remain in effect until the platform's application is either officially approved, withdrawn, or rejected. This mechanism ensures business continuity and protects investors during the regulatory transition.
Any platform that did not submit an application by the February 29 deadline must cease all operations in Hong Kong by May 31, 2024.
Why This Regulatory Shift Matters
Hong Kong's establishment of a clear licensing framework signals its intent to become a leading, secure global hub for digital assets. For exchanges, obtaining a license is crucial for long-term operational legitimacy and building trust with a growing user base. For investors, it provides a layer of protection and a clear indication of which platforms are committed to complying with local laws and security standards. This regulatory clarity is a significant step toward the broader adoption and maturation of the digital asset industry.
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Frequently Asked Questions
What is a Hong Kong VASP license?
A VASP license is official approval from Hong Kong's Securities and Futures Commission (SFC) for a company to operate as a virtual asset service provider. This primarily includes running a virtual asset trading platform, allowing the exchange to offer its services legally to investors within Hong Kong.
Which exchanges have already been approved?
As of now, only two exchanges have received full VASP licenses from the SFC: HashKey Exchange and OSL Exchange. These are the first two platforms to complete the entire approval process under the new regulatory regime.
What happens to exchanges that did not apply by the deadline?
Any virtual asset trading platform that did not submit a license application by the February 29, 2024, deadline is required to wind down and cease all of its business operations in Hong Kong by May 31, 2024. They will not be able to legally serve Hong Kong investors after this date.
What does "deemed-to-be-licensed" mean?
This is a transitional arrangement for existing platforms that applied before the deadline. If the SFC is satisfied that the platform is capable of complying with the regulations, it will be "deemed licensed" from June 1, 2024. This allows it to continue operating while its formal application undergoes a full review.
Why have some major exchanges like Binance not applied?
Global exchanges may choose not to apply for a Hong Kong license for various strategic reasons, which could include a different focus on other markets, the specific compliance costs involved, or a decision to serve users in the region through other means. The absence of an application does not necessarily reflect on the platform's global operations.
How does this benefit a crypto investor in Hong Kong?
This regulatory framework significantly benefits investors by ensuring that licensed platforms adhere to strict standards on security, custody of assets, and anti-money laundering (AML) practices. It provides a safer and more reliable environment for trading virtual assets, helping to protect investors from fraudulent and unsecure platforms.