Victory Fintech Secures SFC License, Ending Hong Kong's 8-Month Crypto Pause

Hong Kong’s Securities and Futures Commission (SFC) has officially granted a virtual asset trading platform (VATP) license to Victory Fintech, marking a pivotal moment for the city’s digital asset ecosystem. This approval is particularly significant as it represents the first license issued by the regulator since June 2025, when Hong Kong BGE received its authorization. The eight-month gap between approvals had led to growing concerns within the venture capital and startup communities regarding the pace of Hong Kong’s regulatory pipeline and its commitment to becoming a premier global crypto hub. This development on February 16, 2026, effectively ends that drought and provides a much-needed boost to local market sentiment.

The licensing of Victory Fintech suggests that the SFC is moving past a period of intense scrutiny and procedural refinement. Since the introduction of the mandatory licensing regime in June 2023, the regulator has maintained an exceptionally high bar for entry, focusing on investor protection, anti-money laundering (AML) compliance, and robust cold-storage custody solutions. For startups and institutional investors, this new approval serves as a "proof of life" for the regulatory process, indicating that the path to full compliance, while arduous, remains open for well-capitalized and operationally sound entities. It also validates the rigorous vetting process that the SFC has implemented to avoid the market failures seen in other jurisdictions.

From a competitive standpoint, Victory Fintech enters a market that is still relatively underserved by fully licensed local players. While several platforms have been operating under "deemed-to-be-licensed" status, the prestige and legal certainty of a full SFC license are critical for attracting institutional capital and forming partnerships with traditional financial institutions. This development is likely to trigger a renewed wave of interest from venture capital firms that have been hesitant to deploy capital into Hong Kong-based crypto startups until the regulatory landscape showed signs of acceleration. The ability to offer regulated services to both retail and professional investors provides Victory Fintech with a significant first-mover advantage over the dozens of firms still stuck in the application queue.

The broader implications for the Asian fintech market are substantial. Hong Kong is in a tight race with jurisdictions like Singapore and Dubai to capture the burgeoning digital asset sector. By resuming the issuance of licenses, Hong Kong is signaling to the global market that its "one country, two systems" framework provides a unique gateway for international firms looking to tap into Asian liquidity while operating under a sophisticated, Western-style regulatory oversight. However, the slow cadence of approvals—only two in the last nine months—highlights the SFC’s cautious "quality over quantity" approach, which may frustrate some larger international exchanges looking for rapid entry.

Looking ahead, the industry will be watching closely to see if Victory Fintech’s approval marks the beginning of a faster licensing cycle. There remains a significant backlog of applicants, and the pressure is mounting on the SFC to provide more clarity on the timelines for the remaining "deemed-to-be-licensed" entities. For venture capitalists, the focus will likely shift toward the infrastructure and service providers that support these licensed platforms, such as institutional custodians, insurance providers for digital assets, and compliance technology startups. The success of Victory Fintech in scaling its operations under the SFC’s watchful eye will serve as a critical case study for the viability of Hong Kong’s regulated crypto model in the years to come.