Crypto Exchange Bybit Applies for Hong Kong VATP License

As Hong Kong seeks to become Asia's crypto/blockchain hub, global exchange Bybit applies for a retail trading license to tap local demand.

Key Insights

  • Cryptocurrency exchange Bybit applies for retail trading license in Hong Kong
  • Bybit seeks to tap growing demand among retail crypto investors in Hong Kong
  • Hong Kong aims to position itself as a crypto/blockchain hub amid China crackdown

HONG KONG (MarketsXplora) – Cryptocurrency exchange Bybit has applied for a retail trading license in Hong Kong, the city’s securities regulator said on Thursday, a move that would allow the Singapore-based company to offer digital asset investments to mom-and-pop investors.

Bybit applied for a Virtual Asset Trading Operator (VATP) license through its Hong Kong entity Spark Fintech Ltd on Jan. 31, according to the Securities and Futures Commission’s (SFC) website.

The SFC is reviewing Bybit’s application along with 13 others for VATP licenses that would enable firms to serve retail crypto investors, while two exchanges – OSL and HashKey – have already secured permits.

Crypto companies like Bybit are looking to tap growing retail demand for digital assets in Hong Kong, encouraged by the city’s pro-crypto approach aimed at building itself into a blockchain hub at a time when near-by mainland China continues to crack down on the sector.

Allowing firms to serve non-professional investors “is an important milestone in the development of Hong Kong’s virtual asset ecosystem,” said Ashley Alder, chief of the SFC, when OSL became the city’s first licensed crypto exchange in 2020.

“Platform operators must ensure proper safeguards to manage risks so that investors using their platforms can trade virtual assets in a regulated environment,” Alder added.

Hong Kong’s proactive embrace of digital assets has seen other regional crypto companies like Binance seek regulatory approval there.

The former British colony prides itself as being one of the most open and competitive financial hubs in the world. While COVID-19 has diminished some of its freewheeling, international aura, officials are keen to reinvent Hong Kong’s image and build new pillars for growth.

“Our vision is for Hong Kong to become a thriving hub for virtual assets globally,” a spokesperson for Hong Kong’s crypto industry regulator said last week.

Some critics however warn establishing another crypto hotspot risks further volatility in a sector prone to spikes and crashes.

Bitcoin, the world’s largest cryptocurrency, soared nearly 70% in 2021 but plummeted 64% in 2022. Nonetheless, its 6% gain so far this year has outpaced traditional assets like stocks and bonds.

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