The financial hub of Hong Kong is making bold strides into the future of digital finance. With a clear regulatory framework now in place, the city is positioning itself as a leading gateway for compliant virtual asset trading in Asia. At the heart of this transformation is the Virtual Asset Service Provider (VASP) license, a regulatory milestone that legitimizes cryptocurrency exchanges operating in or targeting Hong Kong investors.
This article explores the current state of Hong Kong’s VASP licensing regime, identifies the key licensed players, and unpacks what this means for institutional and retail investors alike.
What Is the VASP License?
Introduced by the Securities and Futures Commission (SFC) of Hong Kong, the VASP license regulates platforms offering crypto trading services to retail clients. Prior to this framework, only professional investors could access digital asset exchanges. Now, with strict compliance requirements — including capital adequacy, cybersecurity, anti-money laundering (AML), and custody standards — licensed platforms can legally serve everyday investors.
The goal? To balance innovation with investor protection, creating a trusted environment for digital asset growth.
First Licensed Virtual Asset Exchanges in Hong Kong
As of 2025, two major platforms have successfully obtained full VASP licenses:
1. HashKey Exchange
HashKey is one of the pioneers in Hong Kong’s regulated crypto space. Backed by reputable financial institutions and technology firms, HashKey offers a user-friendly platform supporting spot trading of major cryptocurrencies like Bitcoin and Ethereum. It has also played a key role in launching Hong Kong’s first spot Bitcoin and Ethereum ETFs, bringing institutional-grade products to retail investors.
2. OSL Exchange
Operated by BC Technology Group, OSL is another fully licensed VASP with a strong track record in institutional trading. Known for its robust security infrastructure and transparent operations, OSL provides both retail and wholesale services, including custody solutions and prime brokerage.
These two platforms represent the gold standard in compliance and set a benchmark for others seeking approval.
Companies Applying or Preparing for VASP Licensing
While only HashKey and OSL are currently licensed, several high-profile companies are actively pursuing authorization:
- Greentown Financial Group: A subsidiary of China-based real estate giant Greentown Group has filed intentions to apply for a VASP license, signaling growing interest from traditional finance players.
- JD.com (Jingdong): Reports confirm that JD.com plans to issue a Hong Kong dollar-pegged stablecoin through a regulatory sandbox program overseen by the Hong Kong Monetary Authority (HKMA). While not yet a VASP applicant, this move positions JD at the forefront of blockchain-based payments innovation.
- Various Web3 Startups: Dozens of startups within Hong Kong’s growing Web3 ecosystem are preparing submissions under the SFC’s transitional arrangements, aiming to meet the March 2024 deadline (now extended with case-by-case evaluations).
👉 Discover how top-tier exchanges meet Hong Kong's strict compliance standards.
Regulatory Requirements for VASP Licensing
To obtain a VASP license, applicants must meet rigorous criteria:
- Minimum paid-up capital of HKD 5 million
- Adequate liquid capital reserves
- Secure cold wallet storage with third-party custody
- Comprehensive AML and KYC procedures
- Real-time transaction monitoring systems
- Regular audits and reporting to the SFC
These rules ensure only serious, well-capitalized operators enter the market — reducing risks of fraud and mismanagement.
Why Hong Kong Is Becoming a Crypto Hub
Hong Kong’s push into digital assets isn’t accidental. Several factors contribute to its rising status:
- Pro-business policies: The government actively supports fintech and Web3 innovation.
- Strategic location: Acts as a bridge between mainland China and global markets.
- Legal clarity: Clear regulations reduce uncertainty for investors and firms.
- Support for stablecoins: The HKMA’s sandbox for stablecoin issuers encourages R&D in tokenized money.
- Spot ETF approvals: Hong Kong became one of the first jurisdictions in Asia to approve spot Bitcoin and Ethereum ETFs, boosting institutional adoption.
👉 See how new ETF products are changing crypto investment in Asia.
Common Misconceptions About Hong Kong Crypto Licensing
Despite progress, confusion remains:
❌ “Any company can easily get a crypto license.”
Not true. The SFC conducts deep due diligence. Many applications have been rejected or withdrawn.
❌ “Binance owns a Hong Kong-based exchange called HKVAEX.”
Binance has publicly denied any connection between itself and HKVAEX, clarifying it does not operate a licensed exchange under that name in Hong Kong.
❌ “All virtual banks offer crypto trading.”
No. Virtual banks like ZhongAn Bank or Mox are separate from VASPs. They do not provide crypto exchange services.
Frequently Asked Questions (FAQ)
Q: Can retail investors trade crypto legally in Hong Kong?
A: Yes — but only on SFC-licensed platforms like HashKey and OSL.
Q: Is Bitcoin legal tender in Hong Kong?
A: No. Cryptocurrencies are not legal tender but are recognized as tradable assets under regulation.
Q: Are foreign exchanges allowed to serve Hong Kong users?
A: Only if they are licensed by the SFC. Unlicensed platforms are blocked or face enforcement action.
Q: What is the difference between a virtual bank and a VASP?
A: Virtual banks offer traditional banking services digitally; VASPs specialize in crypto trading and custody.
Q: How long does it take to get a VASP license?
A: Typically 6–12 months, depending on application completeness and compliance readiness.
Q: Will more exchanges be licensed soon?
A: The SFC is reviewing multiple applications. More approvals are expected throughout 2025 as the ecosystem matures.
👉 Stay ahead with real-time updates on upcoming VASP approvals and market shifts.
The Road Ahead for Digital Assets in Hong Kong
Hong Kong’s journey toward becoming a global crypto hub is well underway. With licensed exchanges operational, spot ETFs live, and stablecoin pilots launching, the foundation is strong. The city’s blend of regulatory rigor and innovation-friendly policy makes it a model for other financial centers.
For investors, this means safer access to digital assets. For innovators, it opens doors to capital, talent, and legitimacy.
As more firms navigate the path to full licensing, one thing is clear: Hong Kong isn’t just embracing crypto — it’s shaping its future.