All cryptocurrency exchanges that have not applied for an operational license with Hong Kong’s Securities and Futures Commission (SFC) are now legally required to cease operations in the region immediately. This decisive move aims to safeguard investors by enforcing strict regulatory compliance.
Hong Kong regulators have issued a clear ultimatum to cryptocurrency exchanges: apply for a license by February 29 or shut down within three months. This directive is part of a broader effort to minimize risks and ensure a safer trading environment for investors.
The SFC’s notice emphasized the urgency of compliance. During the application period, more than 22 cryptocurrency exchanges sought licenses to continue their operations in Hong Kong. However, many withdrew their applications just before the deadline, signaling potential challenges in meeting regulatory standards.
In May alone, six exchanges, including major players like OKX and Huobi HK, exited the Hong Kong market. While most did not specify reasons for their withdrawal, Gate.HK cited the need for a “major overhaul” of its trading platform to comply with Hong Kong’s stringent regulatory requirements.
Following its license withdrawal, Gate.HK halted user acquisition and marketing efforts. Existing users have until August 28 to withdraw their funds, as the platform will cease operations on May 28. Popular tokens like Bitcoin (BTC), Ether (ETH), Solana (SOL), and Polygon (MATIC) will be permanently delisted.
Gate.HK has stated its intention to resume operations in Hong Kong after completing the necessary platform overhaul and obtaining the relevant licenses. As of May 31, 18 exchanges have applied for operational licenses, with the SFC set to announce the approved list soon.
It is important to note that not all cryptocurrency exchanges may be granted a license. As a result, some may be required to shut down their operations in Hong Kong.
The SFC advises investors to consult the official list of approved exchanges to mitigate risks associated with cryptocurrency trading. While the SFC’s stringent regulations aim to protect investors and maintain market integrity, they have also raised concerns within the crypto community. Critics argue that the high compliance costs and rigorous requirements could stifle innovation and limit market diversity. The withdrawal of several high-profile exchanges underscores the challenges businesses face in adapting to the new regulatory landscape.
