Hong Kong Demands Immediate Closure of Unlicensed Cryptocurrency Exchanges
Hong Kong has adopted a firm stance against unlicensed cryptocurrency exchanges and has issued a directive for their immediate closure. The Securities and Futures Commission (SFC) of Hong Kong has announced that eleven platforms, including HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixincom, xWhale, YAX, Bullish, Crypto.com, WhaleFin, and Matrixport HK, are now considered to be unlicensed applicants.
Out of the well-known offshore exchanges, only Crypto.com has obtained approval, while others such as OKX, Bybit, Gate, HTX, and Binance have chosen to withdraw. Hong Kong’s regulators have made it clear that cryptocurrency exchanges must either apply for a license by February 29 or cease their operations within three months to mitigate risks for investors.
As the deadline approached, the pressure increased, and more than 22 cryptocurrency exchanges stepped forward to apply for licenses in order to continue their operations in the region. However, many of these exchanges ultimately decided to withdraw their applications.
Gate.HK, a Hong Kong-based exchange, offered some insight into their decision, stating that they needed to undergo a “major overhaul” of their trading platform to comply with Hong Kong’s stringent regulatory requirements.
Several other applicants shared their challenges with well-known blockchain reporter Colin Wu. They revealed that the SFC demanded that license applicants pledge not to target mainland Chinese users anywhere in the world. This requirement proved to be a deal-breaker for them.
The new licensing system for virtual asset trading platforms (VATP), developed by the China Securities Regulatory Commission, has come into effect. The system’s transitional provisions allowed operators to apply for a license and comply with the new regulatory requirements from June 1. This means that they can continue to offer virtual asset services in Hong Kong until the authorities make a final decision on their license applications.
“A Hong Kong legislator criticized the fact that the current applicants are very small and expressed the hope that Hong Kong would not start with a safety-first approach and instead promote so-called innovation with absolutely no risk,” said Colin Wu.
Tags: Crypto Regulations