A number of global exchanges have withdrawn their requests for licenses in Hong Kong.
According to Chiu, the withdrawal of license applications highlighted flaws in licensing system.
A lawmaker from Hong Kong has voiced his displeasure with the “excessively stringent” licensing requirements for cryptocurrency exchanges, claiming that these regulations have discouraged prominent international exchanges from setting up offices in Hong Kong and have lowered investor confidence.
In an opinion post published on Saturday in the Hong Kong Economic Journal, Duncan Chiu, a member of Hong Kong’s Legislative Council, argued that market players’ faith in Hong Kong’s efforts to build Web3 has been eroded due to the recent license withdrawals of numerous worldwide crypto exchanges.
Struggle Continues
Furthermore, if cryptocurrency exchanges do not apply for a license by February 29th, the Securities and Futures Commission has mandated that they must depart Hong Kong by May 31st. Applicants for “deemed-to-be-licensed” status or a valid SFC license will be required of all VATPs doing business in Hong Kong as of June 1, according to the regulator.
Consequently, a number of international exchanges have withdrawn their requests for licenses in Hong Kong. These include OKX, Gate.io, and HTX. According to Chiu, the withdrawal of license applications highlighted significant flaws in the existing licensing system.
He started by saying that many departments in Hong Kong are responsible for crafting regulations pertaining to the growth of the virtual asset market, but that there is a lack of overarching strategic planning for the industry as a whole.
Moreover, some license applicants have complained to the lawmaker that the authorities aren’t thinking ahead to create next-generation fintech, and that marketing Web3 from a traditional finance perspective limits its flexibility, the lawmaker said.
When it comes to Web3, the standards set by the SFC seem “excessively stringent” because they are comparable to those of conventional financial institutions, says Chiu.
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