Gate.HK Shuts Down Amid Licensing Hurdles; Plans Future Relaunch Post Regulatory Compliance
Summary:
Hong Kong-based cryptocurrency exchange, Gate.HK, has shut down operations after failing to meet local licensing requirements set by the Hong Kong Securities and Futures Commission (HKSFC). Despite efforts to secure a license, the exchange withdrew its application due to necessary, large-scale modifications to its trading platform to meet regulatory standards. It is one of four exchanges to withdraw their applications in May, leaving 20 active applicants for Hong Kong's crypto license. Gate.HK plans to resume operations once it has restructured its platform to comply with local regulatory measures.
Cryptocurrency exchange Gate.HK, based in Hong Kong, has ceased operations because it did not meet impending local licensing regulation that comes into effect on June 1. The Hong Kong Securities and Futures Commission (HKSFC) has imposed that all cryptocurrency exchanges operating in the region have explicit operational approval, and any not meeting those conditions by May 31 must shut down. In accordance with this directive, Gate.HK submitted a licensing application to HKSFC on February 28, but opted to retract the application on May 22 referring to significant modifications needed on their trading platform. The list of applicants with returned, declined or withdrawn applications. Source: HKSFC
As of May 23, Gate.HK has put a full stop to all actions linked to client onboarding and promotional activities. Current users are prohibited from depositing, and are only enabled to withdraw till August 28. Gate.HK will conclude operations on its trading platform on May 28, when all tokens will be indefinitely delisted, inclusive of Bitcoin (BTC), Ether (ETH), Solana (SOL), Polygon (MATIC) and Tether (USDT), among others.
The plan for the crypto exchange is to reintroduce services following the reconstruction of its platform in order to meet Hong Kong's regulatory standards. These regulations mandate the provision of Anti-Money Laundering (AML) and counter-terrorist funding arrangements. They said: “Gate.HK is earnestly working on the overhaul we've mentioned. Our aim is to renew our operations in Hong Kong post acquiring licenses in future and contribute to the virtual asset ecosystem.”
Proceeding Gate.HK's shutdown, three additional exchanges, namely Huobi HK, QuanXLab, and IBTCEX, retracted their license applications in May. In total, nine crypto exchanges in Hong Kong have withdrawn their licensing applications.
From May 24 onwards, 20 cryptocurrency exchanges are still in the running for Hong Kong's crypto license. Related: Two-week inflow wiped from Hong Kong Bitcoin and Ether ETFs in a day.
A recent report from Bloomberg suggests that the HKSFC could potentially permit spot ETH exchange-traded fund issuers to incorporate an ETH staking feature that would allow them to produce a passive income. The SFC, after receiving proposals in the recent weeks, considered offering licensed platforms the opportunity to provide staking services to the country's crypto ETF issuers.
The financial regulator is still weighing the issue and has yet to set a timeframe for execution. Magazine: Godzilla vs. Kong: SEC finds itself on the backfoot against the legal muscle of cryptocurrency.
Published At
5/24/2024 1:35:13 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.