Hong Kong's SFC Mandates Operational Licenses for Cryptocurrency Exchanges, Several Platforms Withdraw
Summary:
Hong Kong's Securities and Futures Commission (SFC) has mandated cryptocurrency trading platforms lacking operational licenses to cease operations immediately. The directive follows efforts to minimize investor risk, giving platforms until February 29 to apply for licenses or risk shutting down within three months. Over this period, while 22 platforms applied for licenses, several retracted applications near the deadline. Internationally recognized platforms like OKX and Huobi HK withdrew from the Hong Kong market in May. Gate.HK suspended operations, citing the need for a major overhaul to comply with regulatory standards. Despite these withdrawals, 18 platforms have applied for operational licenses as of May 31. The SFC plans to announce approved exchanges by June 1.
Cryptocurrency trading platforms that have neglected to acquire operational licenses from the Securities and Futures Commission (SFC) in Hong Kong are now under a legal mandate to close down their businesses in the locale promptly. With a view to reduce potential risks to investors, authorities in Hong Kong have put forth an uncompromising choice to these platforms – either request for a license by 29th February or cease operations in a span of three months.
Notification from the SFC in Hong Kong about termination of crypto license applications. Credit: SFC in Hong Kong
Over the course of this timeframe, more than 22 crypto-trading platforms submitted applications for licenses to preserve their operations in the locale. Nevertheless, a significant number of these platforms chose to retract their applications just as the deadline was approaching.
Roster of crypto trading platforms revoking license applications in Hong Kong. Credit: SFC in Hong Kong
In merely the time span of May, six crypto trading platforms, featuring internationally renowned entities such as OKX and Huobi HK, withdrew from Hong Kong's market. While most of the organizations didn't speculate any cause for this unexpected shift of approach, Gate.HK, based in Hong Kong, indicated a need for a significant reworking of their trading platform to meet the regulatory standards of Hong Kong.
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Following the withdrawal of the license, Gate.HK suspended all user recruitment and promotional activities. Its current users are allotted until August 28 for the withdrawal of their funds.
Starting from May 28, Gate.HK’s platform will no longer be in operation and all tokens previously available for trade including Bitcoin (BTC), Ether (ETH), Solana (SOL) and Polygon (MATIC) will be permanently delisted.
“Gate.HK is in the progress of undertaking the aforementioned major overhaul. We are aiming to resume businesses in Hong Kong at a future date and expect to offer meaningful contribution to the virtual asset environment upon receipt of the necessary licenses."
As of the final day of May, 18 cryptocurrency trading platforms have brought forth applications for operational licenses in Hong Kong. The SFC has stated that approved exchanges will be publicized by the first of June.
It is crucial to understand that not all cryptocurrency trading platforms might be awarded a license and subsequent to the SFC's judgment may be forced to halt their operations in Hong Kong.
The SFC recommends investors to verify the official roster of approved exchanges to reduce potential risks associated with trading in cryptocurrencies.
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Published At
5/31/2024 12:04:00 PM
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