Two cryptocurrency exchanges, Gate.io and OKX, withdrew their applications for licenses to operate in Hong Kong in the past two days, signaling a broader retreat by exchanges here.
According to an announcement on the Hong Kong Securities and Futures Commission (SFC) website, a total of eight exchanges, including those backed by Binance and Cooperative, have also abandoned their efforts to apply for a license in Hong Kong. this city.
Some exchanges like Bybit. MEXC has been placed on a suspicious products warning. Previously, the SFC warned that cryptocurrency trading platforms operating in Hong Kong that have not applied for a licence by February 29, 2024, must close by May 31.
On the other hand, the SFC is still reviewing license applications from several other cryptocurrency exchanges such as Crypto.com, Bullish and Matrixport. Notably, the SFC only licenses two exchanges in the region, OSL and HashKey.
OKX withdrew from Hong Kong
In a May 24 announcement, Hong Kong-based cryptocurrency exchange OKX HK said it has withdrawn its application for a Virtual Asset Service Provider (VASP) license in the region.
The exchange said: “OKX will stop providing centralized virtual asset trading services to Hong Kong residents from May 31, 2024 (Friday) upon request from the regulator. Customer assets remain safe and withdrawal services will not be affected. After May 31, 2024, customers can only withdraw funds.”
Therefore, OKX advises customers not to deposit money after May 31, because it may not be processed automatically. The exchange also set a deadline of August 31 for users to withdraw their assets from the platform.
Gate.HK withdrew its license application
Similarly, Gate.HK, the Hong Kong subsidiary of cryptocurrency exchange Gate.io, announced on May 23 the withdrawal of its application for a virtual asset trading platform license.
The company explained that the decision is part of a comprehensive platform reform strategy such as pausing new user registrations, deposits, and marketing activities in Hong Kong. Additionally, the platform intends to delist all major tokens, including Bitcoin, Polkadot, Ethereum, and others.
The platform said it will stop all trading services on May 28 and advises users to withdraw funds before August 28. Launched in 2023, Gate.HK applied for a license with the SFC in February this year.
The withdrawal of Gate.io and OKX along with several other exchanges highlights the difficulties of increasingly strict regulatory compliance for the cryptocurrency sector in Hong Kong. At the same time, it raises doubts about the special zone government's claim to become the region's cryptocurrency center.
