Key Insights
- Hong Kong’s Securities and Futures Commission added crypto exchange Bybit to its warning list of unregulated platforms
- The SFC flagged 11 Bybit products like futures, options and lending as unlicensed offerings for Hong Kong investors
- Bybit is among exchanges seeking a new virtual asset trading license in Hong Kong ahead of an upcoming deadline
HONG KONG (MarketsXplora) – Hong Kong’s markets watchdog added cryptocurrency exchange Bybit to its warning list on Tuesday, saying no entity from the group is licensed to conduct regulated activities in the city.
The Securities & Futures Commission (SFC) flagged Bybit as an unregulated virtual asset trading platform operating across multiple jurisdictions.
It specifically cited 11 crypto products offered by Bybit including futures, options, leveraged tokens, lending and wealth management services as being unlicensed in Hong Kong.
“The SFC is concerned that these products have also been offered to Hong Kong investors and wishes to make it clear that no entity in the Bybit group is licensed by or registered with the SFC,” the regulator said.
The March 14 warning referred to the Bybit.com website operated by owner Bybit Fintech Limited in the Seychelles. A separate Bybit.com.hk site run by Spark Fintech Limited currently does not offer crypto services in Hong Kong.
Bybit has been seeking a virtual asset trading operator (VATP) license in Hong Kong through its Spark Fintech subsidiary, as required for exchanges serving local investors, according to previous reports.
Hong Kong only has two licensed cryptocurrency exchanges so far – OSL and HashKey Exchange.
A new crypto licensing regime introduced last year set a March 1 deadline for exchanges to file VATP applications to continue serving investors in the Chinese territory.
Unlicensed exchanges must cease Hong Kong operations by May 31, while rejected VATP applicants have three months to withdraw.
The SFC warning comes as Hong Kong is pushing crypto exchanges to be licensed and regulated under new virtual asset service provider rules brought in to both enable the industry while protecting investors.
Hong Kong licenses require firms to have tools in place to guard against money laundering and manage risks, amid concerns over wild price swings and cases of fraud involving virtual assets globally.
While once hostile to the crypto industry, Hong Kong is now striving to attract virtual asset firms to build a regulated hub rivalling Singapore.
“We continue to stay laser-focused on garnering the necessary licenses to operate in all jurisdictions,” Bybit said in a statement in response to the SFC warning, committing to cooperating with regulators.