Hong Kong’s SFC Kicks out All Unlicensed Crypto Exchanges

Hong Kong’s Securities Futures Commission (SFC) has required all unlicensed virtual asset trading platforms (VATPs) to exit the city starting tomorrow, June 1, 2024. SFC states, “All VATPs operating in Hong Kong must be either licensed by the SFC or “deemed-to-be-licensed” VATP applicants under the AMLO.”

Also Read: OKX Ends Services in Hong Kong, Withdraws License Bid

Hong Kong regulators issued crypto exchanges a clear ultimatum on February 29 to reduce investor risk: either file for a license by that date or cease operations within three months. That date is here – today.

Hong Kong Lets Go All Unlicensed Crypto Exchanges

Legally, all crypto exchanges in the region are obligated to terminate operations immediately. This comes as a failure to apply for an operational license to Hong Kong’s Securities and Futures Commission.

During this period, 22 crypto exchanges submitted license applications to maintain a regional presence. Before the deadline, however, many of these exchanges ultimately opted to withdraw their applications.

Six crypto exchanges, including global giants such as OKX and Huobi HK, withdrew from the Hong Kong market in May alone.

In contrast to the majority of exchanges, Gate.HK, headquartered in Hong Kong, explained that the unexpected development necessitated substantially restructuring its trading platform to adhere to Hong Kong’s regulatory standards.

Hong Kong needs to take advantage of the technical characteristics of Web 3.0, clear space boundaries to create clarity, increase productivity development, and progress in risk prevention.

Chen Chun.

Chun emphasized the need for a digital currency that can effectively navigate the complexity of the Web3 network. He suggested that Hong Kong regulators aim for an initial money supply of $26 million to $260 million for their central bank digital currency.

Cryptopolitan Reporting By Florence Muchai

Businesses do not invest time and money into a licensing process only to withdraw […] For those that are already operating, the stakes are especially high, as withdrawal means they need to shut down […] They will typically only withdraw if it’s clear they will not meet the bar for approval, perhaps as clear as being directly told by the regulator.”

Insider SCMP

According to Google search results and the website’s source code, the SFC received a new license application this month for a platform named Bitcoinworld. The exchange exploited HTX’s logo as its own. According to HTX, the company is neither a “subsidiary nor a related company.”

Hong Kong’s Contribution to China’s Digital Economy

Despite the country’s ongoing Bitcoin ban, Chen Chun, Professor of the School of Computer Science and Technology at the state-affiliated Chinese Academy of Engineering, described Hong Kong as a “sandbox” for developing Web3 and Mainland China’s digital economy.

Hong Kong needs to take advantage of the technical characteristics of Web 3.0, clear space boundaries to create clarity, increase productivity development, and progress in risk prevention.

Chen Chun.

Chun emphasized the need for a digital currency that can effectively navigate the complexity of the Web3 network. He suggested that Hong Kong regulators aim for an initial money supply of $26 million to $260 million for their central bank digital currency.

Cryptopolitan Reporting By Florence Muchai

Gate.HK is actively working on the aforementioned overhaul. We plan to resume our business in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses.

Gate.HK,.

As of May 31, 2024, 18 crypto exchanges have filed for a license to do business in Hong Kong. The SFC says the list of approved exchanges will be made public by June 1.

Exchanges With Ties to Mainland China Withdraw From HK

Exacting requests from the SFC appear to have led to the dropouts, which now number seven out of the original 24 applications. However, the inability to supply mainland customers could have been a significant cause.

According to an industry insider familiar with the case, the restriction regarding mainland investors was included in a list of conditions provided directly to applicants. This reduced enthusiasm for operating in Hong Kong.

In 2021, the People’s Bank of China warned that providing Bitcoin services to mainland Chinese citizens would be illegal. Many offshore exchanges still rely on Chinese crypto investors who have found workarounds.

Businesses do not invest time and money into a licensing process only to withdraw […] For those that are already operating, the stakes are especially high, as withdrawal means they need to shut down […] They will typically only withdraw if it’s clear they will not meet the bar for approval, perhaps as clear as being directly told by the regulator.”

Insider SCMP

According to Google search results and the website’s source code, the SFC received a new license application this month for a platform named Bitcoinworld. The exchange exploited HTX’s logo as its own. According to HTX, the company is neither a “subsidiary nor a related company.”

Hong Kong’s Contribution to China’s Digital Economy

Despite the country’s ongoing Bitcoin ban, Chen Chun, Professor of the School of Computer Science and Technology at the state-affiliated Chinese Academy of Engineering, described Hong Kong as a “sandbox” for developing Web3 and Mainland China’s digital economy.

Hong Kong needs to take advantage of the technical characteristics of Web 3.0, clear space boundaries to create clarity, increase productivity development, and progress in risk prevention.

Chen Chun.

Chun emphasized the need for a digital currency that can effectively navigate the complexity of the Web3 network. He suggested that Hong Kong regulators aim for an initial money supply of $26 million to $260 million for their central bank digital currency.

Cryptopolitan Reporting By Florence Muchai

Businesses do not invest time and money into a licensing process only to withdraw […] For those that are already operating, the stakes are especially high, as withdrawal means they need to shut down […] They will typically only withdraw if it’s clear they will not meet the bar for approval, perhaps as clear as being directly told by the regulator.”

Insider SCMP

According to Google search results and the website’s source code, the SFC received a new license application this month for a platform named Bitcoinworld. The exchange exploited HTX’s logo as its own. According to HTX, the company is neither a “subsidiary nor a related company.”

Hong Kong’s Contribution to China’s Digital Economy

Despite the country’s ongoing Bitcoin ban, Chen Chun, Professor of the School of Computer Science and Technology at the state-affiliated Chinese Academy of Engineering, described Hong Kong as a “sandbox” for developing Web3 and Mainland China’s digital economy.

Hong Kong needs to take advantage of the technical characteristics of Web 3.0, clear space boundaries to create clarity, increase productivity development, and progress in risk prevention.

Chen Chun.

Chun emphasized the need for a digital currency that can effectively navigate the complexity of the Web3 network. He suggested that Hong Kong regulators aim for an initial money supply of $26 million to $260 million for their central bank digital currency.

Cryptopolitan Reporting By Florence Muchai

Gate.HK is actively working on the aforementioned overhaul. We plan to resume our business in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses.

Gate.HK,.

As of May 31, 2024, 18 crypto exchanges have filed for a license to do business in Hong Kong. The SFC says the list of approved exchanges will be made public by June 1.

Exchanges With Ties to Mainland China Withdraw From HK

Exacting requests from the SFC appear to have led to the dropouts, which now number seven out of the original 24 applications. However, the inability to supply mainland customers could have been a significant cause.

According to an industry insider familiar with the case, the restriction regarding mainland investors was included in a list of conditions provided directly to applicants. This reduced enthusiasm for operating in Hong Kong.

In 2021, the People’s Bank of China warned that providing Bitcoin services to mainland Chinese citizens would be illegal. Many offshore exchanges still rely on Chinese crypto investors who have found workarounds.

Businesses do not invest time and money into a licensing process only to withdraw […] For those that are already operating, the stakes are especially high, as withdrawal means they need to shut down […] They will typically only withdraw if it’s clear they will not meet the bar for approval, perhaps as clear as being directly told by the regulator.”

Insider SCMP

According to Google search results and the website’s source code, the SFC received a new license application this month for a platform named Bitcoinworld. The exchange exploited HTX’s logo as its own. According to HTX, the company is neither a “subsidiary nor a related company.”

Hong Kong’s Contribution to China’s Digital Economy

Despite the country’s ongoing Bitcoin ban, Chen Chun, Professor of the School of Computer Science and Technology at the state-affiliated Chinese Academy of Engineering, described Hong Kong as a “sandbox” for developing Web3 and Mainland China’s digital economy.

Hong Kong needs to take advantage of the technical characteristics of Web 3.0, clear space boundaries to create clarity, increase productivity development, and progress in risk prevention.

Chen Chun.

Chun emphasized the need for a digital currency that can effectively navigate the complexity of the Web3 network. He suggested that Hong Kong regulators aim for an initial money supply of $26 million to $260 million for their central bank digital currency.

Cryptopolitan Reporting By Florence Muchai