Regulation
ultimatum agli crypto exchange without license
Hong Kong officially bans all unauthorized crypto exchanges, i.e. without license. This regulatory measure underlines the SFC’s commitment to creating a safe and transparent environment for trading virtual assets.
Let’s see all the details below.
Crackdown on unlicensed exchanges: Hong Kong’s commitment to a transparent and regulated crypto market
As expected, everything cryptocurrency exchanges that have not applied for an operational license from the Hong Kong Securities and Futures Commission (SFC) must stop immediately their operations in the region.
To minimize risks for investors, Hong Kong regulators have given cryptocurrency exchanges an ultimatum: apply for a license by February 29 or stop operations within three months.
During this period, more than 22 cryptocurrency exchanges applied for a license, but many of them decided to withdraw their applications just before the deadline.
In the month of May alone, six cryptocurrency exchanges, including major global names like OKX and Huobi Hong Kong, withdrew from the Hong Kong market.
The majority of exchanges did not provide an explanation for this sudden change.
However, Door.HKbased in Hong Kong, indicated the need for a “thorough review” of its trading platform before it can comply with Hong Kong regulatory requirements.
Gate.HK Closes Operations: Users Asked to Withdraw Funds Before August 28
As mentioned, following the revocation of the license, Gate.HK stopped acquiring and marketing new users. Existing users had until August 28 to withdraw their funds.
The Gate.HK trading platform will no longer be operational from May 28, and all previously tradable tokens, such as Bitcoin (BTC), Ether (ETH), Solana (SOL) and Polygon (MATIC) will be permanently delisted.
“Gate.HK is actively working on the requested review. We plan to resume operations in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the necessary licenses.
As of May 31, 18 cryptocurrency exchanges have applied for an operational license in Hong Kong. According to the SFC, the list of approved exchanges will be announced by June 1.
At the time of publication, the only approved cryptocurrency exchanges in Hong Kong are HashKey and OSL Exchange.
It is important to note that cryptocurrency exchanges may not obtain a license and, following the SFC’s decision, they may be forced to close their operations in Hong Kong.
The SFC advises investors to check the official body of approved exchanges to minimize the risks associated with trading cryptocurrencies.
Chinese regulatory pressure pushes cryptocurrency companies to withdraw from Hong Kong
Regulatory pressure from mainland China is causing many major cryptocurrency companies to withdraw their Hong Kong license applications.
Local affiliates of major exchanges with ties to mainland China, including OKX, Gate.io, KuCoin, Binance and HTX, have reportedly withdrawn their license applications for a virtual asset trading platform (VATP) in Hong Kong.
Despite launching in China, all listed cryptocurrency companies have expanded their operations to other regions after the initial regulatory crackdown by Chinese authorities.
However, they have shown renewed interest in Hong Kong’s new virtual asset regulatory regime, which came into effect last June, which requires them to obtain licenses to operate in the city.
Reports suggest that stringent Securities and Futures Commission (SFC) requirements and failure to serve mainland clients China may have contributed to these decisions.
In a recent note, the SFC reminded stock traders that they must be “deemed authorized” by June 1 to continue operating in Hong Kong.
The Commission highlighted VAT’s obligation to fully comply with applicable laws and regulations, including preventing mainland Chinese residents from accessing their virtual asset services.
China intensified its crackdown on cryptocurrencies in 2021, when its central bank warned that offering crypto services within its borders violated the law.
Following this development, many exchanges moved overseas, leaving limited operations threatened by other restrictions.