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The Securities and Futures Commission of Hong Kong (SFC) has issued a stern warning against the cryptocurrency exchange Bybit, placing it on the watchlist as of March 14. The SFC stated that Bybit, which provides trading services in various crypto-related products across different jurisdictions, has not obtained a VATP license. It also informed the public about the issue.
Bybit Added to Watchlist
The warning includes 11 products offered by the cryptocurrency exchange Bybit, such as Bybit Futures, Bybit Options, Bybit Leveraged Tokens, Dual Assets, Bybit Lending, and Bybit Wealth Management.
The SFC emphasized that no entity within the Bybit group holds a license or registration with the SFC to conduct any “regulated activity” in Hong Kong, expressing concerns that these products may have been offered to Hong Kong investors.
Crypto-related products, including futures contracts or securities, must obtain a prior license from the SFC before being offered to Hong Kong residents. The warning specifically targets Bybit.com and its Seychelles-registered owner, Bybit Fintech Limited. Notably, this entity is different from Spark Fintech Limited, which currently does not provide crypto services in Hong Kong and has a similar domain name, https://www.bybit.com.hk.
Bybit’s Compliance Assurance Efforts
On February 1st, news surfaced that Bybit, through its affiliate Spark Fintech Limited, was actively pursuing a Virtual Asset Trading Platform license (VATP) in Hong Kong. Currently, only two crypto exchanges in Hong Kong hold an SFC license: OSL Exchange, licensed on December 15, 2020, and HashKey Exchange, licensed on November 9, 2022.
The deadline for crypto exchanges operating in Hong Kong to apply for a VATP ended on February 29. Unlicensed firms must cease operations in the Special Administrative Region by May 31. Similarly, exchanges whose VATP applications are rejected by the SFC must leave Hong Kong within three months.
Consequently, the SFC’s warning to the cryptocurrency exchange Bybit reflects the increasing regulatory scrutiny surrounding crypto exchanges in Hong Kong. As authorities tighten their control over the sector, compliance becomes increasingly crucial for organizations wishing to operate within the region’s legal framework.
