Cryptocurrency exchanges operating in Hong Kong are not required to apply for a Virtual Asset Trading Platform (VATP) license. The license is issued by the city's Securities and Futures Commission (SFC). In the event of failure to do as stated, the exchanges will have no other choice but to leave their headquarters from Hong Kong within the next three months.
These difficult decisions have been put into practice due to the many mistakes that occur on cryptocurrency exchanges. He also stated that by May 31, exchanges that will not have all the documents required for operation must stop. Some to those exchanges whose applications were not accepted by the authorities.
According to a February 26 report, a number of cryptocurrency exchanges have already applied for value-added tax (VATP), and platforms such as OKX, Bybit, crypto.com, and HKVAX are linked to Binance.
After some exchanges issued last year such as jPEX and Hounax, some of the more popular exchanges with the Hong Kong region collapsed. This was after allegations of Ponzi scheme operations. Huge losses occurred as an approximate amount of over $180 million was lost in the process. That's not all, as 145 victims lost $18.9 million in the Honax scam as well. The authorities froze some funds directly linked to JPEX and Hournax.
So far only two exchanges, OSL and hashkey, have registered and obtained their VATP licenses. However, this great step will ensure that the exchanges are registered and qualified to operate. Which makes it more trustworthy for users.
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