The Securities and Futures Commission (SFC) extended its swift licensing process for VATPs to new virtual asset trading platform (VATP) applicants on 16 January 2025. Under this streamlined approach, applicants must establish and implement their compliance measures before undergoing an external assessment, with the SFC directly supervising the process.

This SFC swift licensing process for VATPs builds on the SFC’s proactive engagement with deemed-licensed VATPs, leveraging insights from its risk-based on-site inspections to refine regulatory standards. The goal is to foster a robust virtual asset ecosystem in Hong Kong while enabling compliant platforms to operate more efficiently.

Dr. Eric Yip, the SFC’s Executive Director of Intermediaries, said,

“With the new approach, we will enhance our collaboration with VATP applicants, providing them with constructive and timely feedback, thereby enabling fully compliant VATPs to bring their services to investors more swiftly.”

To further aid applicants, the SFC issued a new circular outlining the updated licensing process and external assessment requirements for new corporations applying to operate a VATP. It replaces the June 2023 guidelines, effective for applications submitted after 18 December 2024.

VATP applicants must work with an external assessor to review their systems and controls under the enhanced licensing process, with the SFC directly involved in the assessment.

The SFC has improved the external assessment process to ensure VATP applicants’ policies, procedures, systems, and controls are effectively designed and implemented, now requiring a direct assurance engagement under relevant standards and frameworks.

This is in line with SFC’s strategic priorities for 2024-2026. The initiative’s third priority, “leading financial market transformation through technology and ESG”, mentions that the SFC would embrace financial innovation while upholding market integrity and advancing its regulatory regime for VATPs.

In 2024, the SFC granted five VATP licenses, including four in December to Accumulus GBA Technology (Hong Kong) Co., Limited, DFX Labs Company Limited, Hong Kong Digital Asset EX Limited, and Thousand Whales Technology (BVI) Limited.

The remaining Hong Kong VATP license applications are being reviewed under the expedited licensing process.

Source of image: Edited from Freepik