Hong Kong’s Crypto Crackdown? 11 Exchanges Get Nod, But Big Names Skip Out

Hong Kong’s Securities and Futures Commission (SFC) has announced that 11 virtual asset trading platforms (VATPs) are poised to receive official licenses, a year after the city introduced new regulations to foster a thriving crypto industry.

Prominent platforms such as Crypto.com and Bullish, identified as “deemed to be licensed” in the SFC’s recent update, are among the applicants close to receiving the licenses. These exchanges, known for their significant global trading volumes, are now a step closer to operating fully under Hong Kong’s regulatory framework.

However, not all major players have sought licensing in Hong Kong. Exchanges like OKX and Bybit have withdrawn their applications, while Binance, the world’s largest exchange, did not apply. Leading U.S.-based platforms Coinbase Global and Kraken have also opted out of seeking permits.

The SFC set June 1 as the deadline for exchanges to either secure a license or be deemed eligible. To continue operating and serving local investors, firms must at a minimum be classified as “deemed to be licensed.” Full licenses will be issued once the SFC confirms ongoing compliance with its regulations.

Hong Kong’s push to become a virtual asset hub began in late 2022 as part of a broader effort to re-establish its status as a global financial center. The city’s initiatives to attract the crypto industry include expanding the list of authorized exchanges, introducing Bitcoin spot and Ethereum exchange-traded funds (ETFs), and developing frameworks for stablecoin regulation and digital bond issuance on tokenization platforms.

Notably, Hong Kong faces competition from other jurisdictions like Dubai and Singapore for the title of top digital asset center. Approximately two dozen entities applied for crypto exchange licenses by the February 29 deadline. Currently, HashKey Exchange and OSL Group are the only two fully licensed VATPs in Hong Kong.