Article Update: May 24, 12:50 pm UTC: Gate.HK, a cryptocurrency exchange based in Hong Kong, has shut down due to its failure to meet the upcoming local licensing requirements that will be enforced from June 1.
The Hong Kong Securities and Futures Commission (SFC) has mandated that all cryptocurrency exchanges in the region must obtain an operational license. Exchanges that have not applied for a license are required to cease their services by May 31.
In compliance with this requirement, Gate.HK submitted its license application to the SFC on February 28. However, the exchange decided to withdraw the application on May 22, stating the necessity for a “major overhaul” of its trading platform.
As of May 23, Gate.HK has ceased all activities related to acquiring new users and marketing. Existing users are no longer able to make deposits and can only withdraw funds until August 28.
Gate.HK will permanently delist all tokens, including Bitcoin (BTC), Ether (ETH), Solana (SOL), Polygon (MATIC), and Tether (USDT), on May 28 when it shuts down its trading platform. The exchange plans to relaunch its services once it has reconstructed its platform to comply with Hong Kong’s regulatory requirements, which involve implementing Anti-Money Laundering and Counter-Terrorist Financing measures. The company stated:
“The news comes just one day before OKX, another major global exchange, announced its withdrawal from Hong Kong on May 24. OKX will cease to offer centralized virtual asset trading services to Hong Kong residents by May 31, 2024,” the announcement noted.
Prior to Gate.HK’s closure, three other exchanges, namely Huobi HK, QuanXLab, and IBTCEX, also withdrew their license applications in May.
In related news, a recent report from Bloomberg indicated that the SFC is considering allowing spot Ether exchange-traded fund (ETF) issuers to include an ETH staking option, thereby enabling them to generate passive income.
According to the report, the SFC has been discussing the provision of staking services through licensed platforms with the country’s crypto ETF issuers following recent proposals. However, there is currently no set timeline for the implementation of these discussions.
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