Cryptocurrency exchange BitMart has made a significant strategic decision to withdraw its Hong Kong VASP license application, joining several major platforms facing the region’s rigorous regulatory framework. This development signals critical challenges for crypto businesses seeking operational approval in Asia’s premier financial hub.
Hong Kong VASP License Requirements Prove Challenging
The Securities and Futures Commission (SFC) maintains strict criteria for obtaining a Hong Kong VASP license. Consequently, platforms must meet substantial financial and operational standards. Specifically, exchanges must maintain:
- Liquid assets covering 12 months of operating expenses
- Minimum capital of HK$5 million ($641,490)
- Cold storage for 98% of client assets
- Comprehensive insurance coverage requirements
Wave of Hong Kong VASP License Withdrawals
BitMart follows other major exchanges in withdrawing Hong Kong VASP license applications. Notably, Bybit, OKX, and Gate.io made similar decisions recently. These withdrawals occurred before regulatory deadlines requiring unlicensed platforms to cease operations. Therefore, the Hong Kong VASP license process demonstrates selective approval standards.
Current Hong Kong VASP License Holders
Despite numerous withdrawals, Hong Kong has approved 11 licensed virtual asset trading platforms. The SFC granted operational licenses to four exchanges in 2025: PantherTrade, YAX, Bullish, and BGE. These successful applicants met all Hong Kong VASP license requirements, including stringent custody and security protocols.
Regulatory Impact on Crypto Operations
Hong Kong’s regulatory approach affects various cryptocurrency sectors beyond exchanges. Recently, the Hong Kong Monetary Authority finalized stablecoin regulations, causing market adjustments. Similarly, new rules prohibit smart contracts for cold wallet management, increasing operational complexity for Hong Kong VASP license holders.
Hong Kong’s Crypto Hub Ambitions
Despite stringent regulations, Hong Kong continues developing its cryptocurrency ecosystem. Major financial institutions like China Merchants Bank have launched crypto services through subsidiaries. The region aims to balance innovation with investor protection through its Hong Kong VASP license framework.
Frequently Asked Questions
Why did BitMart withdraw its Hong Kong VASP application?
BitMart likely faced challenges meeting the SFC’s stringent capital, custody, and insurance requirements for obtaining a Hong Kong VASP license.
How many exchanges currently hold Hong Kong VASP licenses?
Eleven cryptocurrency exchanges currently operate with full Hong Kong VASP licenses, including four new approvals in 2025.
What are the main requirements for a Hong Kong VASP license?
Key requirements include maintaining HK$5 million capital, 12 months of liquid assets, 98% cold storage, and comprehensive insurance coverage.
Which other major exchanges withdrew Hong Kong applications?
Bybit, OKX, and Gate.io previously withdrew their Hong Kong VASP license applications following similar regulatory assessments.
How does Hong Kong’s approach compare to other jurisdictions?
Hong Kong maintains stricter capital and custody requirements than many other regions, prioritizing investor protection through its VASP licensing framework.
