Hong Kong is now forcing unlicensed crypto exchanges to officially close down

All crypto exchanges that have not applied for an operating license from Hong Kong’s Securities and Futures Commission (SFC) are required by law to immediately cease operations in the region.

Minimizing risk for investors

To minimize risks for investors, regulators in Hong Kong have given crypto exchanges a clear ultimatum: apply for a license by February 29 or shut down their operations within three months. During this period, more than 22 crypto exchanges have applied for a license to maintain their presence in the region. However, many of these scholarships decided to withdraw their applications just before the deadline.

In May alone, 6 crypto exchanges, including global players such as OKX and Huobi HK, withdrew from the Hong Kong market. While most exchanges gave no reasons for the surprising turn of events, Hong Kong-based Gate.HK cited the need for a “major overhaul” of its trading platform before it could comply with Hong Kong regulatory requirements.

Gate.HK has already stopped user acquisition, among other things

After the license revocation, Gate.HK stopped user acquisition and marketing. Existing users have been given until August 28 to withdraw funds. The Gate.HK trading platform will no longer be operational as of May 28. All previously tradable tokens, such as Bitcoin, Ethereum, Solana and Polygon, will be permanently removed from the exchange.

“Gate.HK is actively working on the above-mentioned overhaul. We plan to resume our operations in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses,” a company spokesperson said.

18 crypto exchanges have applied for an operational license

As of May 31, 18 crypto exchanges have applied for an operating license in Hong Kong. According to the SFC, the list of approved scholarships will be announced no later than June 1. It is important to note that crypto exchanges may not be licensed and have to close their operations in Hong Kong as a result of the SFC’s decision.

The SFC advises investors to check the official list of approved exchanges to minimize the risks associated with trading cryptocurrencies.