Hong Kong’s regulators have mandated that all cryptocurrency exchanges without a Securities and Futures Commission (SFC) license must immediately halt their operations in the area.
At the year’s start, the SFC clarified that exchanges had to apply for a license by February 29 or discontinue their regional operations within three months.
Out of the numerous exchanges that applied for the necessary Hong Kong licenses, several retracted their applications just before the deadline.
Journalist Colin Wu reported that in the previous month, six major platforms, including OKX, and Gate.HK, and Huobi HK, exited the Hong Kong market. The reasons for their departure were largely undisclosed, with only Gate.HK attributed its exit to the need for significant updates to meet local regulatory standards. As of June 1, virtual asset trading platforms (VATPs) must hold a license under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) to operate legally.
This regulatory update compels VATPs to secure a license from the Financial Services Council or be recognized as ‘deemed licensed’ applicants. Non-compliance is a criminal offence, subject to stringent enforcement measures. Non-adherence to SFC regulations will lead to license denial, potentially forcing platforms out of the Hong Kong market. The SFC has highlighted that these provisional measures aim to foster market growth while protecting investors.