Hong Kong's Securities and Futures Commission (SFC) ordered all unlicensed crypto exchanges to stop operations. With this, only two exchanges remain operational, and numerous others have withdrawn their license applications.
In a decisive move to bolster investor protection and regulatory compliance, the Hong Kong Securities and Futures Commission (SFC) has issued a mandate requiring all unlicensed cryptocurrency exchanges to cease operations immediately. This crackdown is part of a broader initiative to create a secure and transparent environment for virtual asset trading within the region.
Beginning next month, Hong Kong's Securities & Futures Commission (SFC) will require all unregistered virtual asset trading platforms (VATPs) to quit the city: "All VATPs operating in Hong Kong must be either licensed by the SFC, or "deemed-to-be-licensed" VATP applicants under the AMLO".
According to Cointelegraph, the deadline for applying for a license was set for February 29, 2024, with exchanges given three months to comply or shut down. By May 2024, several exchanges, including prominent players such as OKX and Huobi HK, had withdrawn their applications, opting to exit the Hong Kong market instead of undergoing the stringent licensing process.
Gate.HK, another major exchange, cited the necessity of a "major overhaul" of its trading platform to meet the new regulatory standards. Following this decision, Gate.HK has stopped acquiring new users and will cease all operations by August 28, 2024. The platform announced, "We plan to resume our business in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses".
Currently, only HashKey and OSL Exchange have been approved to operate under the new regulatory framework. This has significantly narrowed the field of licensed operators, highlighting the rigorous standards imposed by the SFC.
Hong Kong’s regulatory stance reflects a growing global trend towards tighter control over the cryptocurrency industry. The aim is to mitigate risks associated with unregulated trading platforms, which have been prone to fraud, security breaches, and other malpractices.
For investors and stakeholders in the cryptocurrency market, this development signifies a critical juncture. The enforced regulations are expected to enhance market integrity and protect investors, though they may also limit the availability of trading platforms in the short term.
Future developments will likely serve as a bellwether for regulatory approaches in other major financial hubs around the world.
See also: OKX lists Ultiverse (ULTI) to expand spot trading offering