Cryptocurrency exchange Bybit has officially applied for a Virtual Asset Service Provider (VASP) license in Hong Kong, as revealed in recent regulatory filings. The Dubai-based platform joins 14 other applicants seeking approval from the Securities and Futures Commission (SFC) to operate in the region.
Key Details of Bybit's Application
- Application Date: Submitted on January 31 through Spark Fintech Limited
- Current Status: Approval timeline remains undisclosed by regulators
- Market Context: Only OSL Exchange and HashKey Exchange have secured full licensing thus far
👉 Discover how top exchanges navigate regulatory challenges
Hong Kong's Crypto Landscape
Bybit first signaled its Hong Kong expansion plans in April 2023, intending to establish its central Asian operations hub in the city. The exchange plans to relocate portions of its:
- Marketing teams
- Research divisions
- Development departments
CEO Ben Zhou praised Hong Kong's financial ecosystem, noting: "The city offers exceptional liquidity through institutional capital flows, supported by mature capital markets and financially sophisticated investors."
Regulatory Challenges in Hong Kong
While some industry leaders applaud Hong Kong's approach, critics highlight significant hurdles:
- Wang Yang, HKUST Vice President, describes the licensing system as "burdensome"
- Existing licensed exchanges report operational challenges
- Some describe the framework as "Licensed to Be Killed"
The SFC maintains rigorous standards, with only 2 of 16 applicants receiving full approval to date. Other major platforms like OKX remain in the application queue alongside Bybit.
Frequently Asked Questions
Q: How many crypto exchanges are currently licensed in Hong Kong?
A: Only two - OSL Exchange and HashKey Exchange - hold full operating licenses.
Q: What services does Bybit plan to offer in Hong Kong?
A: While specifics remain undisclosed, VASP licenses typically cover trading, custody, and related virtual asset services.
Q: Why is Hong Kong attractive to crypto businesses?
A: The region offers institutional-grade liquidity, financial infrastructure, and proximity to mainland China's markets.
👉 Learn about exchange licensing requirements worldwide
Q: What challenges do licensed exchanges face?
A: Regulatory compliance costs, operational restrictions, and competitive pressures from unregulated platforms.
The Road Ahead for Bybit
Industry analysts will closely monitor:
- The SFC's review timeline
- Potential operational requirements
- Market response to new licensed entrants
Bybit's application represents continued institutional interest in Hong Kong's regulated crypto framework, despite the complex approval process. The exchange has not issued additional public comments beyond its initial filing.