The Hong Kong Securities and Futures Commission (SFC) has set a deadline of February 29 for cryptocurrency companies to obtain a license to operate as a virtual asset trading platform (VATP).
The SFC has also set a minimum user deposit insurance level of 50% for licensed cryptocurrency exchanges to ensure user protection and mitigate the consequences of potential security breaches.
US cryptocurrency exchange Crypto.com has applied for a virtual asset trading platform (VATP) license.
Currently, there are 18 cryptocurrency companies listed on the SFC's official website awaiting the Hong Kong regulator's decision. Among them are Bybit, OKX, Bullish, and VAEX.
The regulator is taking all steps to secure Hong Kong's place as a leading cryptocurrency center in the world, while retaining full control over the companies' operations. Therefore, the SFC has set February 29 as the deadline for exchanges to apply for a license, otherwise they will be forced to close by May 31.
The SFC has made its position clear: without a license, exchanges operating in Hong Kong will be closed. This is to ensure investor protection, which is not limited to standard security breaches and insolvency, but also extends to server downtime, data backups and other incidents.
The regulator also urged platform users to independently verify whether a cryptocurrency company has applied for a license and move their accounts to licensed platforms before the May 31 deadline.
Only two cryptocurrency companies, OSL and HashKey Exchange, can currently boast of having a license. They are legally allowed to serve retail investors in Hong Kong, while the remaining 18 applications are pending.
Crypto.com exchange's intentions confirm the company's commitment to comply with regulatory requirements and expand its crypto services in the Asian market.
It is worth noting that the SFC has warned that applying for a license does not guarantee that it will be granted. Thus, the prospects of Crypto.com, as well as 17 other crypto companies, remain uncertain.
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