Bybit acquires VATP license in Hong Kong to strengthen cryptocurrency operations
Bybit, a popular cryptocurrency exchange, has taken a strategic step to expand its presence by applying for a virtual asset trading operator (VATP) license from the Hong Kong Securities and Exchange Commission (SFC). The license application, submitted through Spark Fintech Limited on January 31, is currently under review, making Bybit one of 14 candidates vying for a VATP license, an important regulatory approval for cryptocurrency exchanges operating in Hong Kong.
Hong Kong’s regulatory environment and cryptocurrency hub ambitions
Cryptocurrency licensing scene in Hong Kong
Currently, only two cryptocurrency exchanges in Hong Kong hold SFC licenses. OSL Exchange was licensed on December 15, 2020 and HashKey Exchange was licensed on November 9, 2022. Bybit’s pursuit of a VATP license reflects the evolving dynamics of cryptocurrency regulation in the region.
VATP vs VASP License
The VATP license has special significance as it allows Hong Kong-based cryptocurrency companies to provide services to retail customers. In contrast, virtual asset service providers (VASP) Licenses are more restrictive, allowing companies to only serve professional investors. The latter requires investors to have a portfolio worth at least HK$8 million ($1.03 million) to qualify as a professional investor.
Hong Kong’s aspirations as a cryptocurrency hub
In 2023, Hong Kong is positioning itself as a cryptocurrency-friendly destination, taking a separate direction from mainland China’s strict stance on digital assets. The SFC has introduced cryptocurrency-focused regulations that will facilitate the participation of both institutional and retail investors in cryptocurrency markets.
Cryptocurrency ETF environment in Hong Kong
The groundwork laid by Hong Kong regulators became clear on December 22, when the SFC engaged with the Hong Kong Monetary Authority. (HKMA), announced that it is ready to accept applications for a cryptocurrency exchange-traded fund (ETF). This move further solidifies Hong Kong’s status as a cryptocurrency hub.
Market development and future prospects
Application of Bybit according to industry trends: Bybit’s application fits a broader trend of cryptocurrency exchanges seeking regulatory approval, with OKX among the 14 candidates undergoing SFC review. As the regulatory environment evolves, obtaining a VATP license will strategically position Bybit in Hong Kong’s growing cryptocurrency market.
Cryptocurrency ETF environment in Hong Kong: The region has seen an influx of futures-based cryptocurrency ETFs, as exemplified by Samsung Asset Management’s launch of the Samsung Bitcoin Futures ETF in January 2023. The fact that industry players such as Samsung Asset Management have expressed a willingness to explore spot ETFs further highlights this level of maturity. Hong Kong’s cryptocurrency ecosystem.
In summary, Bybit’s pursuit of a VATP license is a pivotal moment in its expansion strategy that reflects Hong Kong’s commitment to fostering a strong and inclusive cryptocurrency market.
disclaimer: This article is for informational purposes only and does not provide financial advice. Investing in cryptocurrency carries risks and individuals should conduct their own research.