The Virtual Asset Trading Platform (VATP) is a license provided by the government of Hong Kong that allows crypto exchanges to operate within the bounds of the region.

Although the license has been available for several years now, only two exchanges – HashKey and OSL – are currently in possession of one. A number of applicants have been on the waitlist for a while – including HTX, formerly known as Huobi, until yesterday, when the firm withdrew its application.

Earlier Plans Abandoned

Previously, HTX CEO Justin Sun had stated that his exchange would pursue a VATP license, allowing his exchange to operate in Hong Kong.

At the time, HTX was looking into ways to expand its reach globally, in spite of a spate of attacks that could have seriously damaged the exchange’s credibility had they not been thwarted.

One planned expansion method was the founding of Huobi Hong Kong due to China’s perceived dominance in the industry and the resulting need to have a base of operations close to the action.

“China’s dominance in the [cryptocurrency] space is becoming more and more apparent. With this in mind, I’ve decided to move to Hong Kong to be closer to the action and take advantage of the opportunities in Asian market.”

At the time, Sun also indicated that he intended to look for opportunities to expand in “friendly regions” like Japan and the Caribbean, leaving a possible expansion to the US and Canada for later.

However, this plan seems to have been abandoned.

Withdrawal Shortly Before Deadline

According to Hong Kong’s financial regulator, SFC, all crypto exchange platforms looking to do business in the city-state must submit their application before the 29th of February. This law went into effect in June 2023, giving lawyers for crypto platforms plenty of paperwork to fill out.

“The significant compliance obligation has not deterred interest from crypto firms hoping to gain a foothold in Hong Kong. We have been inundated with requests from existing and new market entrants who want to become licensed in Hong Kong.”

If a platform is denied a license – or fails to register a request by the 29th – the exchange must cease business in Hong Kong by the first of June.

HTX had applied on the 23rd of February but has since withdrawn its application. Neither Justin Sun nor any representative of the exchange has commented publicly on the reason for the brusque withdrawal.

Currently, the list of exchanges waiting for a VATP license includes companies like OKX, Huobi, and 16 other platforms.