As the transition period for licensing Virtual Asset Service Providers (VASP) in Hong Kong comes to a close this month, the Securities and Futures Commission is poised to make a crucial decision about the future of existing service providers. The fate of these platforms hangs in the balance, with several having already withdrawn their local license applications.

Former Chairman of the Hong Kong Computer Society, Xu Jiansheng, believes that the cost of operating trading platforms in Hong Kong is relatively high, including licensing fees and the hiring of responsible personnel. This has led to a lack of significant trading activity on existing local platforms, with liquidity not as high as that of overseas platforms.

The inability of these platforms to attract overseas customers has further exacerbated the issue, with the market struggling to accommodate many license applicants. Large international platforms with mature overseas businesses may withdraw their applications due to profitability concerns in the local market.

The uncertainty surrounding the future of local trading platforms in Hong Kong is a significant concern, as it may impact the overall health of the cryptocurrency market in the region. The decision by the Securities and Futures Commission will have far-reaching implications for the industry, and it remains to be seen how the market will adapt to any changes that may be implemented.

In conclusion, the transition period for VASP licensing in Hong Kong is a critical moment for the industry, with the fate of local trading platforms hanging in the balance. The decision by the Securities and Futures Commission will have significant implications for the market, and it is essential that the agency carefully considers the long-term consequences of its actions.