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Hong Kong Orders Immediate Shutdown of Unlicensed Cryptocurrency Exchanges
Hong Kong has taken a tough stance against unlicensed cryptocurrency exchanges, issuing a directive for their immediate closure. Hong Kong’s Securities and Futures Commission (SFC) has revealed that eleven platforms, including HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixincom, xWhale, YAX, Bullish, Crypto.com, WhaleFin and Matrixport HK, are now considered applicants in possession of a licence.
Only Crypto.com has secured approval from well-known offshore exchanges, while others such as OKX, Bybit, Gate, HTX and Binance have withdrawn. Hong Kong regulators have been clear: cryptocurrency exchanges must apply for a license by February 29 or cease operations within three months to minimize risk to investors.
The pressure was on and over 22 cryptocurrency exchanges stepped forward, applying for licenses to continue their regional operations. However, many of these exchanges withdrew as the deadline approached, choosing to withdraw their applications.
Hong Kong-based Gate.HK provided some information, citing the need for a “major overhaul” of its trading platform to meet Hong Kong’s stringent regulatory requirements.
Many other candidates have shared their challenges with renowned blockchain reporter Colin Wu. They revealed that the SFC asked license applicants to promise not to develop mainland Chinese users anywhere in the world. This requirement proved to be an obstacle for them.
The new licensing system for virtual asset trading platforms (VATP), established by the China Securities Regulatory Commission, came into effect today. The system’s transitional arrangements allowed operators to apply for a license and comply with new regulatory requirements from 1 June.
This meant that they could continue to provide virtual asset services in Hong Kong until the authorities made a final decision on their license applications.
“A Hong Kong legislator criticized that the current candidates 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,” he said Colin Wu.