Hong Kong's government has enacted the 2022 Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill, mandating that all Virtual Asset Service Providers (VASPs) must obtain a license by June 1, 2023, to operate legally. This includes centralized/decentralized exchanges and NFT platforms.
Key Developments in Hong Kong’s Crypto Regulation
1. Licensing Framework Effective June 2023
- Unlicensed VASPs (e.g., Binance, Bybit, OKX) risk legal penalties if they continue operating in Hong Kong.
- Only OSL Digital Securities and HashKey Brokerage currently hold licenses.
2. Recent Withdrawals of License Applications (May 2024)
- Multiple exchanges, including OKX, Gate.HK, and HTX (Huobi HK), abruptly withdrew applications before the May 31 deadline.
- OKX announced user fund withdrawals post-application retraction.
- Binance remains unlicensed in Hong Kong and has no local office.
3. Bybit’s Restricted Services (April 2024)
- Bybit limited functionalities for Hong Kong users (e.g., disabled P2P trading) after being flagged as "unlicensed."
4. Approved Licensed Exchanges
- HashKey and OSL upgraded licenses in August 2023 to serve retail investors.
- Four other exchanges (e.g., HKVAX, HKBitEx) are under review as of September 2023.
Regulatory Highlights
- Retail Trading: Opened cautiously—only BTC, ETH, and other high-cap cryptos allowed.
- Stablecoins: Future regulations planned for 2024; currently excluded from retail trading.
- Bank Integration: ZA Bank launched crypto-to-fiat withdrawals in April 2023, easing liquidity.
- No Yield Services: Lending/earning products remain banned for licensed exchanges.
👉 Explore licensed crypto exchanges
FAQs
1. Which cryptos are legal in Hong Kong?
Only large-cap assets like BTC and ETH are approved for retail trading. Stablecoins and governance tokens are restricted.
2. Can I still use Binance in Hong Kong?
Binance lacks a local license; users risk fund freezes if the platform is barred.
3. Are NFTs regulated?
Pure collectibles are exempt, but NFTs with financial utility (e.g., payment/ownership rights) may fall under VASP rules.
4. Is P2P crypto trading illegal?
Peer-to-peer trades are not targeted unless facilitated by an unlicensed exchange.
Conclusion
Hong Kong’s crypto framework balances innovation with compliance, though shifting deadlines and abrupt application withdrawals signal uncertainty. Investors should prioritize licensed platforms for secure trading.