Bybit, one of the biggest cryptocurrency exchanges in the world has applied for a VATP license with the Securities and Futures Commission of Hong Kong (SFC). The platform reportedly applied for a VATP registration on 31st January 2024. Virtual Asset Trading Operation (VATP) allows firms to operate as regulated cryptocurrency exchanges in the region.
As per SFC filings, Bybit applied for the license on the last day of January, 2024. The firm worked in tandem with Spark Fintech Limited.
SFC officials have reported that the regulatory agency is considering around 14 more VATP applicants. Thus far, there are only two licensed VATPs operating in Hong Kong that have received a certification from SFC. The first firm is OSL Exchange which received a trading license on 15th December, 2020 and the second one is HashKey Exchange which was certified on 9th November, 2022.
VATP firms are only allowed to offer trading services to trained investors. Under the Hong Kong legislature, investors that have a portfolio of a minimum of 8 million HK dollars an equivalent of $1.03 million are qualified as professionally trained investors.
Hong Kong to Become a Leading Crypto Destination for Firms and Investors
Hong Kong has been introducing policies and regulations that optimize the region as a hub for cryptocurrency trading and development. The government of Hong Kong adopted a pro-crypto stance after the Chinese regulators introduced a blanket ban on the industry.
Regulators in Hong Kong have introduced various crypto-friendly policies in the region since that time. The provisions issued by SFC have allowed both retail and commercial participants to access cryptocurrencies as a legalized mode of trading.
SFC officials are also opting for a crypto-based ETF or exchange-traded fund. The regulatory agency invited wanton applicants to apply for a listing in December 2022. The agency was joined by the Hong Kong Monetary Authority (HKMA).
In 2023, Hong Kong placed itself as one of the top destinations for cryptocurrency firms and businesses. At present, SFC has reportedly received a number of Bitcoin spot ETF applications. Meanwhile, the agency has already approved a series of futures-based cryptocurrency ETFs.
Samsung Asset Management listed the shares of Samsung Bitcoin Future ETF in the first month of 2023. The firm noted that it had not ruled out the possibility of listing a spot Bitcoin ETF.
The Impact of the Data Act on Crypto in Europe
21Shares has published a report to account for the global regulatory changes and developments that can impact the crypto industry. The report titled ‘state of crypto’ has pointed out a geographical competition among various nations optimized to become the next crypto hub.
21Shares is one of the major asset management firms that have issued a Bitcoin spot ETF with Ark Invest. The firm recently published the 11th version of this report on 28th January, 2024. This report dealt with the effect of regulatory guidelines and policies that are in the pipeline.
However, the analysts at 21Shares have noted that the EU and the USA emerged as the top two jurisdictions last year that have adopted policies to set back crypto development. The report noted that Markets in crypto asset regulation (MiCA) could bring greater regulatory clarity for registered services providers.
However, a clause in the Data Act may support shutting down smart contracts that are one of the foundational aspects of blockchain projects. Data Act was published on 22 Dec, 2023 as a way to facilitate and promote data sharing and utility within the European Economic Area.
The clause mandates that all smart contracts include a termination mechanism that could intercept or halt ongoing transactions and internal functions.