The Bitcoin Association of Hong Kong (BAHK) has issued a stern warning regarding the impending deadline for the Securities and Futures Commission’s (SFC) new crypto licensing regime, stating that the current rollout risks forcing numerous virtual asset service providers (VASPs) to shut down operations. The SFC mandate requires all centralized crypto exchanges operating in Hong Kong to obtain a formal license or prepare for closure by the regulatory deadline, set to take effect later this year. BAHK argues that the transition period is too short, and the requirements—particularly those concerning custody, insurance mandates, and rigorous anti-money laundering (AML) protocols—are prohibitively burdensome for many existing operators. The group emphasized that while regulatory oversight is necessary, the current framework risks driving out established, compliant entities that cannot rapidly pivot to meet the stringent technical and organizational criteria. Industry experts fear that a significant number of exchanges, particularly those catering to international clientele, will fail to meet the compliance bar in time, leading to reduced market competition and potential destabilization of the local crypto ecosystem.
Source: Hong Kong group warns crypto licensing rollout risks forced shutdowns
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