With the rapid development of the global financial market, the regulatory policies of virtual asset exchanges (VASPs) in various countries have become increasingly stringent. As an international financial center, Hong Kong's regulator, the Securities and Futures Commission (SFC), is also constantly strengthening the management of the virtual asset industry. According to the latest regulations, all virtual asset exchanges operating in Hong Kong must submit VASP license applications by the end of the month, otherwise their business will have to end by June. The introduction of this policy marks another important milestone in Hong Kong's financial supervision, and has also aroused widespread attention and discussion within and outside the industry.

Against this background, we need to explore in depth the impact of this policy, the necessity of implementation, and possible future development directions.

First of all, this decision by the Hong Kong Securities and Futures Commission is not accidental, but a microcosm of the tightening of virtual asset supervision worldwide. In recent years, with the rapid development of virtual currencies such as Bitcoin and Ethereum, more and more investors have poured into this market. However, with it come many risks, including market manipulation, fraud, and money laundering. These problems not only harm the interests of investors, but also pose a threat to the stability of the financial market. Therefore, regulators in various countries have introduced policies to strengthen the supervision of virtual assets to maintain the healthy development of the market.

In this context, the Hong Kong Securities and Futures Commission chose to set an application deadline for VASP licenses, aiming to improve the transparency and compliance of the industry through an effective regulatory framework. The application requirements for VASP licenses include strict compliance checks, financial audits, and customer identity verification, which will help filter out non-compliant exchanges and improve the overall security of the market.

However, this policy has also caused a lot of controversy. Some small exchanges said that due to the high compliance costs, it is difficult to complete the license application in a short period of time, and they may be forced to withdraw from the market. This not only has an impact on the operations of these exchanges, but also will reduce market competition, thereby affecting investors' choices.

While discussing the impact of the policy, we should also pay attention to its long-term impact on the market. In the long run, the implementation of the VASP license will prompt virtual asset exchanges to improve their own technical level and service quality to adapt to increasingly stringent regulatory requirements. At the same time, legally operating exchanges will be more favored by investors, which will promote the healthy development of the industry.

Looking ahead, how will Hong Kong's virtual asset market develop? We can analyze it from several aspects. First, with the gradual improvement of regulatory policies, future virtual asset exchanges will pay more attention to compliance and transparency. Compliance is not only a legal requirement, but also an important means for exchanges to enhance their competitiveness. Exchanges that can effectively manage risks and enhance user trust will occupy a more advantageous position in the market.

Secondly, technological innovation will be an important driving force for the development of the virtual asset market in the future. With the continuous advancement of blockchain technology, exchanges will be able to provide more secure and efficient trading services. For example, through smart contract technology, exchanges can achieve automated transaction clearing, reduce the risk of human intervention, and improve transaction efficiency. This will attract more investors to participate, thereby further expanding the market size.

Of course, the implementation of the policy also takes time to test its effectiveness. In the short term, there may be market fluctuations, and the withdrawal of some exchanges may also cause panic among investors. However, in the long run, this policy will bring a more stable and healthy development environment to Hong Kong's virtual asset market.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

CoinCircle (120bTc.coM): After the Hong Kong government officially opened the application for virtual asset service provider (VASP) licenses on June 1 last year, it began to disclose the relevant lists of application status in late September, including the list of licensed platforms, platforms that have applied for licenses, and closed platforms.

Hong Kong Treasury Bureau: If you have not applied by the end of February, you must end your Hong Kong business before 5/31

According to the press release of the Hong Kong Securities and Futures Commission (SFC) today (5), the SFC stated that the one-year transition period for the licensing system for virtual asset service providers is about to end. All Hong Kong virtual asset service providers must submit license applications on or before February 29 this year, otherwise they must end their business in Hong Kong before May 31, 2024.

At the same time, the authorities remind investors: if the virtual asset trading platforms used by investors for trading are operated in Hong Kong and are not on the "List of Licensed Virtual Asset Trading Platforms" or the "List of Applicants for Virtual Asset Trading Platforms", they should make preparations as early as possible before May 31, 2024, such as closing their accounts on these virtual asset trading platforms, or transferring to virtual asset trading platforms licensed by the SFC to trade virtual assets.

 Status of Hong Kong VASP license application (2 companies have passed, 14 companies are under review)

According to the SFC information, the virtual asset trading platforms that have been officially licensed by the SFC are HashKey Exchange and OSL Exchange.

In order to enhance investment security, the SFC requires the two to conduct due diligence before listing virtual assets for trading to ensure that the relevant assets meet the token inclusion criteria and must be approved by the SFC, and sufficient information must be disclosed to investors.

There are 14 companies currently waiting for VASP license review, including OKX, Bybit, Panther
Trade (Cheetah Trading Co., Ltd.), BGE, HKbitEX (Hong Kong Digital Asset Trading Group Co., Ltd.), HKVAX (Hong Kong Virtual Asset Exchange Co., Ltd.), VDX (Victory Digital Technology Co., Ltd.), Meex... etc.

It is worth mentioning that in addition to Bitget, an exchange that has previously made it clear that it will give up applying for a Hong Kong license, well-known platforms such as (), (HTX) and Gate.io, which were rumored to take action, have not yet appeared on the list published by the Securities and Futures Commission.

Virtual asset service providers that have submitted applications

In addition, as the Hong Kong Securities Regulatory Commission continues to strengthen its supervision of virtual assets, the international market will also pay close attention to Hong Kong's movements. As a financial center, Hong Kong's policy changes may affect regulatory trends in other regions. In the future, other countries and regions may also learn from Hong Kong's experience and introduce similar regulatory measures to cope with the rapid development of the virtual asset market.

For investors, in the face of this change, they should enhance their risk awareness. Compliance will become an important consideration when choosing an exchange. Only those exchanges that have obtained VASP licenses can operate legally within the legal framework and provide a relatively safe trading environment.

In general, this new regulation of the Hong Kong Securities Regulatory Commission is an inevitable choice in the context of the global financial market, and its implementation will have a profound impact on the virtual asset market. Although it may bring some fluctuations and challenges in the short term, in the long run, this policy will promote market compliance and transparency and provide investors with a safer trading environment.

In this era of change, the future of the virtual asset market is full of opportunities and challenges. As investors, we need to pay attention to market dynamics and improve our risk management capabilities in order to seize opportunities in the changes. This policy of Hong Kong is not only a supervision of virtual asset exchanges, but also a guide to the development direction of the entire industry, which is worthy of our deep thought and expectation.