The Hong Kong Securities and Futures Commission (SFC) has entered a pivotal phase in its regulation of virtual asset trading platforms (VATPs), with 24 firms officially submitting applications for licensing under the city’s mandatory framework. As the February 29, 2025 deadline passed, the regulatory spotlight intensifies on which platforms are positioning themselves for long-term compliance—and which major players are notably absent.
Under the SFC’s 12-month transitional regime launched in June 2024, existing virtual asset platforms operating in Hong Kong were required to apply for formal licensing by early 2025 or face having to wind down operations by May 31, 2025. Failure to comply constitutes a criminal offense, underscoring the seriousness of the new regulatory environment.
Currently, only OSL and HashKey hold full VATP licenses. All other platforms—despite being recognized applicants—are still under review and not yet authorized by the SFC. This means users trading on these platforms do so at their own risk, as they are not yet protected under full regulatory oversight.
Major Players Step Up: Who Applied?
Among the 24 applicants are several well-known names in the global crypto space:
- OKX (via OKX Hong Kong FinTech Company) – applied November 16, 2023
- Crypto.com (through Foris DAX HK Limited) – applied February 9, 2024
- Bybit (via Spark Fintech Limited) – applied January 31, 2024
- Huobi HK (HBGL Hong Kong Limited) – re-submitted application on February 26, 2024 after earlier withdrawal
- Futu’s PantherTrade – applied November 15, 2023
- Gate.HK, WhaleFin, Bixin.com, and Matrixport HK also joined the applicant list before the cutoff
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The applicant pool reflects a mix of international exchanges tailoring services for the Greater Bay Area and homegrown fintech ventures aiming to capture regulated market share. Notably, many applicants have chosen to localize operations through dedicated Hong Kong entities, signaling a strategic shift toward compliance-first models.
Missing Giants: Where Are Binance and Coinbase?
Despite widespread industry movement, two of the largest global exchanges—Binance and Coinbase—have not submitted applications for a Hong Kong VATP license. Their absence raises questions about their regional strategy and willingness to meet local regulatory demands, which include strict anti-money laundering (AML) protocols, custodial safeguards, and ongoing audits.
Without an active application, both platforms would be required to cease operations in Hong Kong by May 31, 2025, unless they announce a change in stance. The SFC has emphasized that continued service provision without proper authorization is illegal and may result in enforcement action.
This development could open doors for compliant competitors to gain market dominance among retail and institutional investors seeking regulated access to digital assets.
Understanding the Risks: SFC Warns Investors
The SFC has issued clear warnings: just because a platform has applied does not mean it is licensed or compliant. Applicants remain unregulated until formal approval is granted. Trading on these platforms carries inherent risks, including lack of investor protection, potential liquidity issues, and uncertain governance standards.
“Investors should verify whether their chosen platform appears on either the licensed list or the applicant list,” said an SFC spokesperson. “If not, they should consider closing accounts or transferring assets to an authorized platform.”
Users are encouraged to check the official SFC VATP portal regularly for updates.
Key Compliance Requirements for VATP License
To qualify for a license, platforms must meet rigorous criteria set by the SFC:
- Minimum $5 million HKD capital requirement
- Robust cybersecurity infrastructure
- Clear separation between client and company funds
- Comprehensive AML/KYC procedures
- Regular third-party audits
- Disclosure of token listing policies
- Insurance coverage for hot wallets
These measures aim to protect retail investors while fostering innovation within a secure framework.
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FAQ: Your Questions Answered
Q: Does applying guarantee a license?
A: No. Submitting an application does not ensure approval. The SFC evaluates each case based on financial stability, compliance systems, and operational transparency.
Q: Can I still use a platform that hasn’t been licensed yet?
A: Yes—but with caution. Platforms under review aren’t fully regulated. You may lack recourse in disputes or during insolvency events.
Q: What happens if a platform doesn’t apply?
A: It must exit the Hong Kong market by May 31, 2025. Continuing to serve Hong Kong users afterward is a criminal offense.
Q: Are there penalties for non-compliant platforms?
A: Yes. Unauthorized operation can lead to fines, asset freezing, and criminal prosecution of responsible individuals.
Q: How can I check if my exchange is approved?
A: Visit the SFC’s official website and consult both the “Licensed VATPs” and “Applicant Platforms” lists.
Q: Will more platforms apply in the future?
A: While the transitional window closed, new entrants can still apply under standard procedures—but they cannot operate until fully licensed.
The Road Ahead: A New Era for Crypto in Asia
Hong Kong is positioning itself as a regulated hub for digital asset innovation in Asia. With clear rules now in place, the city aims to attract responsible players while weeding out untrustworthy actors. The current batch of 24 applicants represents a critical test of this vision.
For investors, the message is clear: choose platforms wisely. Prioritize those actively pursuing or already holding SFC approval. For businesses, the message is equally firm—compliance is no longer optional.
As global regulators tighten oversight, Hong Kong’s model could serve as a blueprint for balancing innovation with investor protection.
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