Cryptocurrency exchanges operating in Hong Kong are not required to apply for a Virtual Asset Trading Platform (VATP) license. Licenses are issued by the Securities and Futures Commission (SFC) of the City of Hong Kong. If it does not act as stated, the exchange will have no choice but to withdraw its facilities from Hong Kong within the next three months.
These tough decisions have been implemented because there is a lot of fraudulent activity happening within crypto exchanges. It was also stated that exchanges that do not have the necessary documents to operate must cease operations by May 31st. This also includes those to exchanges whose applications were not accepted by the authorities.
According to a February 26 report, a number of crypto exchanges have already applied for VATP, including OKX, Bybit, crypto.com, and Binance-linked HKVAX.
Following last year's reporting exchanges such as jPEX and Hounax, some of the most high-profile exchanges with the Hong Kong region have collapsed. This was in response to suspicions of a pyramid scheme. Huge losses of approximately over $180 million were incurred in this process. In the Hounax scam he also lost his $18.9 million to 145 victims. Authorities have frozen some funds directly related to JPEX and Hournax.
So far, only two exchanges have registered and received a VATP license: OSL and Hashkey. However, this great move ensures that the exchange is registered and eligible to operate, making it more reliable for users.
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