BitMart Withdraws Hong Kong VASP License Application Amid Strict Regulations

BitMart Joins Wave of Withdrawals

Crypto trading platform BitMart has pulled its application for a virtual asset service provider (VASP) license in Hong Kong, according to an update from the Securities and Futures Commission (SFC) on Thursday.

BitMart is the latest in a growing list of exchanges to back away from Hong Kong’s licensing regime. Bybit, OKX, and Gate all withdrew their applications in May 2024, just before the SFC’s deadline that required all unlicensed platforms to cease operations locally

The trend highlights mounting challenges for centralized exchanges seeking to comply with Hong Kong’s stringent crypto requirements.

Why Exchanges Are Struggling With Hong Kong’s Rules

Hong Kong’s framework for crypto trading platforms is one of the strictest globally. Key requirements include:

• Liquidity & Capital: Exchanges must hold liquid assets equal to 12 months of operating expenses and maintain at least HK$5 million ($641,490) in paid-up share capital.

• Custody Standards: At least 98% of client assets must be stored in cold wallets. Transfers are only permitted to whitelisted addresses.

• Insurance: 100% of hot wallet funds and 50% of cold wallet funds must be insured.

• Custody Regulation: Newly approved rules ban the use of smart contracts for cold storage management, tightening custody practices further.

These rules aim to boost investor protection but have proven difficult for many global exchanges to meet, prompting several withdrawals.

Related: Hong Kong Court Issues Tokenized Legal Notices to Target Illicit Crypto Wallets

List of applicants whose licence applications have been returned, refused or withdrawn. Source: Hong Kong SFC

Licensed Exchanges in Hong Kong

As of 2025, only four exchanges have successfully secured operational licenses in Hong Kong:

• PantherTrade

• YAX

• Bullish

• BGE

In total, 11 licensed platforms currently operate under the SFC’s oversight, a small fraction compared to the dozens that initially applied.

List of licensed virtual asset trading platforms. Source: Hong Kong SFC

Hong Kong’s Push to Become a Crypto Hub

Despite the exodus of some exchanges, Hong Kong continues to position itself as a regulated global crypto hub.

• CMB International Securities Limited, a subsidiary of China Merchants Bank, recently launched a crypto exchange in the city.

• The Hong Kong Monetary Authority (HKMA) finalized its stablecoin regulatory framework earlier this month, setting strict standards for issuers.

However, the rollout of these new frameworks has also shaken local markets. On August 1, several Hong Kong-based crypto firms recorded double-digit losses as the new rules proved more stringent than anticipated. Analysts described the sell-off as a “healthy correction”, signaling a recalibration toward long-term compliance.

Conclusion: Opportunity or Overregulation?

BitMart’s withdrawal underscores the tension between Hong Kong’s ambition to be a leading crypto hub and the heavy compliance burdens placed on exchanges.

While the city’s rigorous standards aim to ensure investor protection and long-term stability, they have also created significant barriers for global players. For now, only a select group of well-capitalized exchanges remain positioned to benefit from Hong Kong’s regulated crypto future.

Related: China’s Central Bank Highlights Hong Kong’s Crypto Licensing in Recent Report

FAQs

1. Why did BitMart withdraw its Hong Kong VASP license application?

BitMart pulled its application due to Hong Kong’s strict crypto regulations, which include high capital requirements, strict custody rules, and mandatory insurance.

2. Which other exchanges withdrew from Hong Kong’s VASP regime?

Bybit, OKX, and Gate also withdrew their applications in 2024 before the SFC’s deadline.

3. How many exchanges are currently licensed in Hong Kong?

As of 2025, only 11 exchanges are licensed under the SFC, including PantherTrade, YAX, Bullish, and BGE.

4. What makes Hong Kong’s crypto rules so strict?

Exchanges must meet liquidity and capital thresholds, store 98% of assets in cold wallets, insure client funds, and follow strict custody practices.

5. Is Hong Kong still aiming to be a global crypto hub?

Yes, despite withdrawals, Hong Kong is pushing forward with regulated frameworks, including stablecoin oversight and new institutional crypto platforms.