Hong Kong recently made headlines for its tough stance on unlicensed cryptocurrency exchanges. The Securities and Futures Commission (SFC) issued a directive ordering eleven platforms, including well-known ones like HKbitEX, PantherTrade, and Crypto.com, to either secure a license or shut down.
Among these, only Crypto.com managed to secure approval, while others, such as OKX, Bybit, and Binance, chose to withdraw. The SFC’s message was clear: apply for a license by February 29 or cease operations within three months.
Facing pressure, over 22 exchanges initially applied for licenses to continue operating regionally.
However, as the deadline neared, many withdrew their applications. Gate.HK, for instance, highlighted the need for a significant platform overhaul to meet Hong Kong’s stringent regulations.
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Insight from various applicants revealed additional challenges. Some disclosed that the SFC demanded a commitment not to cater to mainland Chinese users globally, which proved to be a sticking point for them.
Meanwhile, the China Securities Regulatory Commission implemented a new licensing system for virtual asset trading platforms (VATP), effective June 1.
This allowed operators to apply for a license and adhere to new regulatory standards while continuing to offer services until their applications were reviewed.
“A Hong Kong legislator criticized the fact that the current applicants are very small and that Hong Kong cannot retreat to the safety line from the beginning and hopes to promote so-called innovation with completely zero risk,” said Colin Wu.