The cryptocurrency exchange Bybit has submitted an application for a Virtual Asset Trading Operator (VATP) license from the Hong Kong Securities and Exchange Commission (SFC). The application was made through the commercial entity Spark Fintech Limited on January 31. The SFC is currently reviewing a total of 14 similar VATP applications, with another submitted by the cryptocurrency exchange OKX. In Hong Kong, there are only two cryptocurrency exchanges that hold licenses from the Securities and Futures Commission: OSL Exchange, licensed on December 15, 2020, and HashKey Exchange, licensed on November 9, 2022.
The VATP license in Hong Kong enables companies to offer services to retail clients, while the Virtual Asset Service Provider (VASP) license limits services to professional investors. Professional investor status in Hong Kong requires investors to hold a portfolio worth at least HK$8 million ($1.03 million). Hong Kong's pro-crypto regulatory stance has positioned it as an attractive destination for cryptocurrency companies in 2023, especially in contrast to mainland China's crackdown on digital assets. The Securities and Exchange Commission in Hong Kong has introduced more cryptocurrency-oriented regulations in 2023, allowing both institutional and retail investors to participate in the cryptocurrency market.
On December 22, 2022, Hong Kong signaled its readiness for cryptocurrency exchange-traded fund (ETF) applications, as the Securities and Futures Commission announced its preparedness to accept applications in collaboration with the Hong Kong Monetary Authority (HKMA). The cryptocurrency market in Hong Kong has seen growing interest, and other firms are already offering futures-based cryptocurrency ETFs. For example, Samsung Asset Management launched the Samsung Bitcoin Futures ETF in January 2023. There are also reports that Samsung Asset Management is not ruling out exploring the possibility of launching a spot ETF in the future.
As the regulatory landscape in Hong Kong becomes more favorable for cryptocurrency-related activities, the region is likely to witness increased attention and participation from cryptocurrency companies and investors throughout 2023.
