Last week, the JPEX crypto exchange suspended its Hong Kong operations amid a string of arrests and fraud charges. According to authorities, the company lied about applying to the Hong Kong Securities and Futures Commission (SFC) for a Virtual Asset Trading Platform VATP license.
In a bid to prevent future confusion over which platforms the regulator has or has not sanctioned, on Monday, September 25, the SFC released a list of VATP applicants. But a number of major global exchanges are absent, including those like Huobi that have stated their intention to apply.
In a statement released on Monday, the SFC said “the JPEX incident highlights the risks of dealing with unregulated VATPs and the need for proper regulation to maintain market confidence.”
“It also shows that dissemination of information to the investing public […] can be further enhanced,” the press release added.
Going forward, the Hong Kong regulator said it would publish lists of licensed VATPs and exchanges required by law to cease operations in the territory.
Additionally, “in light of public demand,” the SFC said it would disclose a list of VATP applicants.
Meanwhile, during the press conference on Monday morning, the SFC said that HKVAX, HKBitEx, Hong Kong BGE Limited and Victory Fintech Company Limited have also applied for the VATP license.
Considering that only 2 crypto exchanges have secured the sought-after permit from the SFC, it may come as a surprise that major platforms have yet to apply for a VATP license. Nevertheless, several exchanges have stated their intention to do so.
Yet, nearly 4 months since the regulator opened applications on June 1, the exchange appears not to have formally submitted its full application.
In the meantime, few exchanges have offered much insight into their application progress. Rather Vaguely, Jimmy Lai, the Global Chief Commercial Officer of OKX, recently stated that the exchange is on track to submit its application to the SFC “next year.” But he didn’t give any specific deadline for the planned submission.
Notably, some of the world’s largest exchanges have remained silent on the matter. To date, Binance, Coinbase and Kraken have yet to declare whether they intend to apply for a VATP license. Yet, with the SFC increasingly willing to crack down on unregistered crypto firms, if they want to continue serving customers in Hong Kong, they will need to move soon or face being blacklisted by the regulator.