BitMart Withdraws Hong Kong VASP Application: A Deep Dive with Current Data
Breaking News
On August 28, 2025, BitMart formally withdrew its application for a Virtual Asset Service Provider (VASP) license with Hong Kong’s Securities and Futures Commission (SFC). This move places BitMart alongside other major exchanges—such as Bybit, OKX, and Gate—that previously pulled out of the licensing process .
Key Regulatory Requirements in Hong Kong
To operate in or target investors in Hong Kong, VASP license applicants must meet rigorous standards, including:
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Maintain liquid assets equal to 12 months of operating expenses, plus at least HKD 5 million (~USD 640,000) in paid-up share capital .
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Ensure 98% of client assets are held in cold storage, and only allow transfers to whitelisted addresses .
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Implement strict key management systems and have robust governance frameworks .
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Secure liability insurance covering 100% of hot wallet holdings and 50% of cold wallet holdings.
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Comply with new crypto custody regulations that disallow smart-contract-based cold wallet management
BitMart's Licensing Journey and Strategic Shifts
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BitMart initially submitted its licensing application on June 27, 2025, under the name Spread Technologies Hong Kong Limited .
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Earlier in March 2025, the company had secured a Trust or Company Service Provider (TCSP) license, enabling it to offer digital asset custody services .
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Despite this regulatory foothold, BitMart ultimately decided to withdraw its VASP application on August 28, 2025.
Wider Market Context and Regulatory Landscape
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Several notable exchanges—Bybit, OKX, Gate, among others—have previously pulled out of the licensing pipeline, citing high compliance costs and limited market appeal in Hong Kong .
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Hong Kong’s drive to become a regulated crypto hub is evident, with four exchanges (PantherTrade, YAX, Bullish, and BGE) granted operational VASP licenses in 2025—bringing the total number of licensed platforms to 11 .
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The SFC and the Hong Kong Monetary Authority (HKMA) are also rolling out a stablecoin regulatory framework that took effect in August 2025—underscoring the uptick in regulatory stringency across the market .
Implications & Analysis
| Aspect | Analysis |
|---|---|
| Strategic Positioning | Withdraws VASP application may reflect BitMart’s reassessment—likely prioritizing regulatory compliance costs versus market benefit. With custody licensing in hand, the layer of regulatory participation remains meaningful. |
| Hong Kong Market Challenges | Hong Kong’s limited retail market (approx. 7.5 million population), plus stringent requirements, make offerings here less lucrative for global exchanges. |
| Reputation & Compliance | BitMart’s TCSP license showcases its continued commitment to regulatory alignment—serving as a bridge for future participation if the licensing landscape evolves favorably. |
| Regulatory Precedent | This move highlights a broader industry trend: crypto firms assessing jurisdictional trade-offs and retreating when cost outweighs returns—even in strategic hubs like Hong Kong. |
BitMart’s withdrawal of its VASP license application as of August 28, 2025, underscores the high bar set by Hong Kong’s crypto regulations—even though the company retains a TCSP custody license. This development reflects a continued industry trend: platforms cautiously testing the regulatory waters, sometimes stepping back when hurdles outweigh benefits.
That said, Hong Kong remains a measured-growth crypto hub. With 11 exchanges currently licensed and a robust framework for stablecoins in place, the market is navigating toward stability and institutional-grade operations
