The licensing system for VASP in Hong Kong has officially come into effect!

This move marks the implementation of the core framework for the regulation of virtual assets in Hong Kong, making it the first jurisdiction in Asia to explicitly require licensed operations for trading, setting a benchmark for the standardization of the industry in the region.

While the virtual asset industry is rapidly emerging, scandals such as fraud, money laundering, and platform failures are frequent, exacerbating financial risks. Major global financial centers are all advancing regulatory arrangements. Hong Kong, as an international financial center, relying on its mature regulatory experience and open market environment, has taken the lead in implementing the VASP licensing system, achieving a balance between risk prevention and control and industry innovation.

The core of the VASP licensing system this time is "operating with a license and developing in a standardized manner". According to the regulations, centralized institutions providing virtual asset-related services to retail investors in Hong Kong must apply for a license from the Securities and Futures Commission (SFC), and unlicensed institutions are not allowed to operate. This requirement sets the industry's entry threshold and puts an end to the "unregulated growth" business model. The issuance of the first batch of temporary licenses not only demonstrates the regulatory support for compliance transformation but also provides practical examples for subsequent institutions, facilitating a smooth transition for the industry.

For local industries in Hong Kong, this system will promote industry restructuring and standardization: unlicensed institutions will be phased out, resources will be concentrated towards compliant leading institutions, and market order will be optimized; at the same time, it will force institutions to strengthen internal controls, improve standards for anti-money laundering and investor protection, reduce industry risks, and enhance market confidence. For retail investors, licensed operations mean greater security and fairness in transactions, and a more transparent investment environment.

From both regional and global perspectives, this system holds significant exemplary value. Prior to this, most regions in Asia had a regulatory void for virtual assets. Hong Kong took the lead in clarifying the principle of licensing, filling the regional regulatory gap and providing a reference for other Asian regions. Simultaneously, a clear regulatory framework will attract high-quality global institutions to establish operations, drive the integration and innovation of virtual assets with traditional finance, and solidify Hong Kong's position as an international financial center.

The regulation of virtual assets is a systematic project, and the implementation of the licensing system is merely the starting point. Going forward, regulatory bodies need to refine their detailed rules to address new technological challenges, industry institutions need to adapt to regulatory compliance and innovation, and investors should also foster a rational mindset, recognize risks, and choose licensed institutions for trading.