Bybit Faces Heat: Hong Kong’s SFC Issues Stark Unlicensed Warning

• The Hong Kong Securities and Futures Commission (SFC) has put crypto exchange Bybit on its warning list for offering unlicensed crypto trading services to local investors.
• Bybit’s Hong Kong subsidiary Spark Fintech has applied for a virtual asset trading platform (VATP) license but does not currently provide local crypto services
• Bybit faces an uncertain future in Hong Kong as unlicensed firms must cease operations by May 31; its subsidiary’s VATP application status will determine if Bybit can legally continue local offerings.

Hong Kong’s Securities and Futures Commission (SFC) has put cryptocurrency exchange Bybit on its warning list as of March 14. This article will provide details on the warning and Bybit’s operations in Hong Kong.

Bybit’s Unlicensed Status

The SFC stated that Bybit offers trading services for crypto-related products in several jurisdictions without proper licensing. It specifically warned about 11 Bybit products offered to Hong Kong investors without authorization. These products constitute securities or futures contracts requiring SFC licensing before being offered in Hong Kong.

Bybit Subsidiary’s License Application

Bybit’s warning refers to its Seychelles parent company, separate from its Hong Kong subsidiary Spark Fintech Limited. Spark Fintech has applied for a virtual asset trading platform (VATP) license in Hong Kong but does not currently provide local crypto services. Only two Hong Kong crypto exchanges are currently SFC-licensed.

Regulatory Deadlines and Implications

The February deadline has passed for Hong Kong crypto exchanges to file VATP applications. Unlicensed firms must cease local operations by May 31. Likewise, exchanges whose VATP applications are rejected must exit Hong Kong within three months. The SFC warning puts pressure on Bybit regarding its subsidiary’s outstanding application.

Conclusion

Bybit finds itself in regulatory limbo in Hong Kong. While its subsidiary seeks licensed status, Bybit remains on the SFC warning list for offering unlicensed crypto products. Its operations face an uncertain future depending on the fate of its VATP application.