Thomas Daniels
Crypto exchange BitMart has officially withdrawn its application for a Virtual Asset Service Provider (VASP) license in Hong Kong, joining a growing list of platforms retreating from the city’s increasingly strict regulatory environment.
According to the Securities and Futures Commission (SFC), BitMart, operating locally through Spread Technologies Hong Kong Limited, initially submitted its VASP application on June 27, 2025. The application was formally withdrawn on August 28, 2025.
The move aligns with a broader trend among global crypto exchanges. Bybit, OKX, and Gate also pulled their applications by the end of May 2024, ahead of the SFC’s compliance deadline that required all unlicensed platforms to cease operations. This deadline marked a regulatory turning point, enforcing robust compliance across all centralized crypto platforms targeting Hong Kong investors.
Under Hong Kong’s regulatory regime, crypto exchanges must meet high capital and operational thresholds. These include holding liquid assets equivalent to one year of operating expenses and maintaining a minimum of HK$5 million (approximately US$641,490) in paid-up capital. Additionally, 98% of client assets must be kept in cold storage, with transfers restricted to whitelisted addresses only. Exchanges are required to implement strict key management protocols, and insurance must fully cover hot wallets and at least half of cold storage assets.
New rules introduced this month further prohibit the use of smart contracts in managing cold wallets, tightening custody service standards even more.
Despite the regulatory hurdles, Hong Kong continues to position itself as a leading hub for digital assets. As of 2025, the SFC has issued operational licenses to four exchanges—PantherTrade, YAX, Bullish, and BGE—bringing the total number of licensed platforms in the city to eleven.
In a sign of institutional adoption, CMB International Securities, a subsidiary of China Merchants Bank, recently launched its own crypto exchange in Hong Kong, signaling confidence in the jurisdiction’s long-term potential as a global crypto center.
On the stablecoin front, the Hong Kong Monetary Authority has finalized a regulatory framework for issuers, introducing another layer of oversight. While designed to instill market confidence, the framework triggered a sharp correction among affected firms, many of which posted double-digit losses on August 1. Market analysts viewed the drop as a necessary recalibration, citing the unexpectedly stringent requirements for stablecoin operations.
