VATP Licensing Regime

Definition ∞ The VATP Licensing Regime refers to the regulatory framework established by the Securities and Futures Commission (SFC) in Hong Kong for Virtual Asset Trading Platforms. This regime mandates that platforms offering virtual asset trading services in Hong Kong must obtain a license and adhere to strict regulatory requirements. These requirements cover areas such as asset custody, cybersecurity, anti-money laundering measures, and investor protection. The regime aims to provide regulatory clarity and foster responsible development of the virtual asset market.
Context ∞ The VATP Licensing Regime is a significant development in the global regulation of digital assets, often featured in crypto news as Hong Kong positions itself as a virtual asset hub. Its implementation means that platforms operating in Hong Kong must meet high standards, which can enhance investor confidence but also presents operational challenges for some firms. The SFC’s approach is closely watched by other jurisdictions considering similar regulatory frameworks for digital asset exchanges.