Bybit’s VATP Application License in HK Is Now Withdrawn With Legal Challenges

Bybit, one of the leading cryptocurrency exchanges globally, has withdrawn its application for a virtual asset trading platform (VATP) license in Hong Kong. The withdrawal comes following scrutiny from the Securities and Futures Commission (SFC), who previously labeled Bybit as an unregistered exchange and issued warnings to investors. The SFC had also warned Bybit and MEXC for promoting trading services to Hong Kong residents without proper licensing. The withdrawal of Bybit’s VATP application coincides with recent rumors that no offshore licenses will be issued in Hong Kong soon, leading to seven exchanges exiting the licensing process. Despite regulatory tightening, Hong Kong remains a vibrant hub for digital assets, as evidenced by the recent approval of spot Bitcoin and Ethereum ETFs. However, the region’s shift away from serving as a proxy to China may impact its attractiveness to investors. Alongside the regulatory challenges, Bybit has also faced internal turmoil over a mishap with the Notcoin (NOT) airdrop, which resulted in the resignation of several CEOs and the exchange compensating 320,000 users with $26 million.