HKX joins list of crypto exchanges to quit Hong Kong market
Update July 24, 9:10 am UTC: This article has been updated to clarify that Gate.HK previously withdrew its Hong Kong license application voluntarily due to an internal business decision.
Cryptocurrency exchange HKX has joined the growing list of exchanges that have withdrawn their license applications to the Hong Kong Securities and Futures Commission (SFC).
On July 18, the HKX management team announced its decision to shut down the Hong Kong-based crypto exchange, advising existing users to withdraw their crypto assets. The notice published on the official website stated:
“We would like to inform you that our management team has, after careful consideration, decided to withdraw our application for the Type 1 and Type 7 licenses under the Securities and Futures Ordinance (Cap. 571) and the virtual asset service provider license under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).”
Struggle to comply with Hong Kong regulations
HKX initially applied for a Hong Kong license in February. However, like many others, the exchange failed to comply with Hong Kong’s regulatory requirements.
HKX crypto exchange’s defunct trading platform. Source: hkx.hi.com
As of July 22, a total of 13 cryptocurrency exchanges or trading platforms have withdrawn their license applications in Hong Kong, with one having its application returned for undisclosed reasons.
List of applicants whose license applications have been returned, refused or withdrawn by the SFC. Source: The Securities and Futures Commission of Hong Kong
Crypto withdrawals from a defunct crypto exchange
In preparation for its winddown, HKX halted new user registrations and suspended trading and deposit services on May 29. With no immediate plans to restart services or reapply for a license, HKX committed to assisting its users with the safe withdrawal of all assets from the platform.
Hong Kong-based cryptocurrency exchange Gate.HK had previously withdrawn its license application, citing the need for a “major overhaul” of its trading platform.
However, while announcing its shutdown in May, the exchange revealed plans for reconstructing its platform to comply with Hong Kong’s regulatory requirements. These requirements include establishing Anti-Money Laundering and Counter-Terrorist Financing measures. The company said:
“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.”
Currently, Gate.HK allows only the withdrawal of funds for its customer base.