Hong Kong Crypto Exchanges Face Licensing Deadline Amidst Mounting Controversies
Summary:
Hong Kong crypto exchanges have until Feb 29 to secure a virtual asset trading platform (VATP) license from the city's Securities & Futures Commission (SFC) or dissolve their operations and exit the market within three months. Thus far, 18 crypto exchanges have applied, while four have withdrawn their applications. Currently, only OSL and HashKey hold VATP licenses in Hong Kong. Unauthorized crypto exchanges remain an issue in the region as allegations of Ponzi schemes caused two major exchanges, JPEX and Hounax, to collapse last year, resulting in significant investor losses. Additionally, Bitcoin exchange BitForex is under investigation following controversial activities, amidst a surge in crypto license applications in Hong Kong.
Hong Kong's cryptocurrency exchanges have until February 29 to secure a license for a virtual asset trading platform (VATP) from the city's Securities & Futures Commission (SFC), or they must terminate their operations and exit the market within three months. By February 26, 18 crypto exchanges, including OKX, Bybit, Crypto.com, and Binance-associated HKVAX, had submitted applications for the license. In the meantime, four applications have been withdrawn since the new licensing system was implemented in August of the previous year. Huobi HK, the Hong Kong branch of cryptocurrency exchange Huobi (now HTX), submitted its VATP application on February 20, but retracted it three days later without giving a reason for the withdrawal. Once approved, these exchanges will be permitted to allow retail investors to engage in trading Bitcoin (BTC) and Ether (ETH). The SFC is presently examining various altcoins and stablecoins for trading sanction.
Currently, OSL and HashKey are the only exchanges to have been granted VATP licenses in Hong Kong. Local media reports suggest that any operation not complying with VATP rules must halt all activity by May 31. Additionally, exchanges denied a VATP license by the SFC are required to leave the city within three months. Despite clear regulations, unlicensed crypto exchanges persist in Hong Kong.
In the previous year, two major crypto exchanges in Hong Kong, JPEX and Hounax, collapsed following accusations of engaging in Ponzi schemes, causing an estimated loss of $180 million from the JPEX debacle and $18.9 million from 145 victims in the Hounax fraud. Although some linked funds have been seized by authorities, most investor money is yet to be recovered.
On February 26, another crypto exchange in Hong Kong, BitForex, fell into controversy as it stopped user redemptions and withdrew $56 million from its hot wallets the day before. The exchange has also ceased responding to users, with an investigation currently in progress. Meanwhile, Hong Kong is witnessing a rise in applications for crypto licensing.
Published At
2/26/2024 10:10:00 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.