Hong Kong Ends Eight-Month Crypto License Lull with Victory Fintech Approval

The Hong Kong Securities and Futures Commission (SFC) has officially added Victory Fintech to its exclusive list of licensed virtual asset trading platforms (VATPs), ending an eight-month hiatus in new approvals. This development is a critical milestone for the region's digital asset ecosystem, as it represents the first license granted since Hong Kong BGE received its approval in June 2025. The move underscores the SFC's rigorous, high-standard approach to oversight, which has seen several high-profile international exchanges withdraw their applications over the past year due to the stringent compliance requirements of the city's Virtual Asset Service Provider (VASP) regime.

Victory Fintech’s successful navigation of the licensing process places it within a very small cohort of regulated entities authorized to serve both retail and professional investors in Hong Kong. The timing of this approval is particularly noteworthy, coming after a period of perceived regulatory stagnation that led some industry observers to question whether Hong Kong was losing its competitive edge to other jurisdictions like Dubai or Singapore. By granting this license, the SFC is signaling that its doors remain open to firms that can meet its exacting standards for investor protection, anti-money laundering (AML) protocols, and secure asset custody.

From a market perspective, the approval of Victory Fintech is expected to bolster institutional confidence in the local crypto landscape. For much of late 2025, the narrative surrounding Hong Kong's crypto ambitions was dominated by the exit of major players who found the 'dual-licensing' requirements too burdensome. Victory Fintech’s entry suggests that the regulatory framework is achievable for firms with deep local roots or those willing to invest heavily in bespoke compliance infrastructure. This may encourage other 'deemed-to-be-licensed' applicants currently in the queue to finalize their operational upgrades in hopes of securing a full license.

Furthermore, this approval aligns with Hong Kong's broader strategic goal of integrating digital assets into its traditional financial framework. As the city explores the launch of more spot crypto ETFs and stablecoin regulations, having a robust network of licensed exchanges is essential for providing the necessary liquidity and price discovery mechanisms. The SFC’s decision to resume licensing suggests a shift toward a more active phase of market expansion, where the focus moves from establishing rules to populating the ecosystem with compliant operators.

Looking ahead, the industry will be watching closely to see if Victory Fintech’s approval triggers a 'domino effect' for other pending applications. There are still several dozen firms operating under transitional arrangements, and the SFC’s willingness to grant new licenses will be the ultimate litmus test for the city's status as a premier crypto hub. For investors, the expansion of licensed platforms provides more options for regulated trading, potentially reducing the counterparty risks that have historically plagued the offshore digital asset markets. The long-term success of this initiative will depend on whether these licensed platforms can attract sufficient volume to compete with global, non-regulated alternatives while maintaining the high costs of SFC compliance.