Bybit Pulls Out of Hong Kong as Regulatory Hurdles Mount for Crypto Industry

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Bybit Pulls Out of Hong Kong as Regulatory Hurdles Mount for Crypto Industry
  • Bybit has withdrawn its application for a virtual asset trading platform license in Hong Kong.
  • Major exchanges like Binance, OKX, and Gate.io’s HTX have also faced similar fate.
  • Speculation arises that the Hong Kong SFC may be hesitant to grant licenses to offshore exchanges at this time.

Bybit, a leading Virtual Asset Trading Platform (VATP), has withdrawn its application for a license to operate in Hong Kong, joining a growing list of international platforms unable to secure regulatory approval.

The exchange initially submitted its application to the Hong Kong Securities and Futures Commission (SFC) on January 31, 2024, but formally withdrew it on May 31, according to an updated list on the SFC’s website.

Bybit’s withdrawal mirrors a pattern seen with other major exchanges, such as Binance, Gate.io, and HTX, whose applications have been either returned, rejected, or withdrawn.

Market insiders speculate that the Hong Kong SFC may be hesitant to grant licenses to offshore exchanges, although no official statement has been made to confirm these rumors.

The SFC maintains a list of VATP applicants whose license applications have been removed for various reasons, including incomplete submissions, unresolved fundamental issues, or voluntary withdrawal by the applicants. Among the most recent removals are those of Gate Digital Limited (Gate.io) and OKX, whose applications were withdrawn on May 22 and May 24, 2024, respectively.

The SFC also publishes a list of licensed virtual asset trading platforms, but the regulator clarifies that it does not endorse their performance or creditworthiness. The list includes entities such as OSL Digital Securities and Hash Blockchain, that have formal licenses to operate in Hong Kong from 2020.

The withdrawal of Bybit’s application and the apparent trend of offshore exchanges facing challenges in obtaining Hong Kong licenses may suggest a tightening of regulatory oversight in the region.

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