Hong Kong has made the decision to stop accepting applications for licenses from cryptocurrency exchanges starting from February 29th. It has also stated that all noncompliant trading platforms will be required to cease their operations locally. The Securities and Futures Commission (SFC) of Hong Kong has emphasized that all cryptocurrency exchanges in the region that have failed to file for license applications must wind up their business by May 31st, 2024.
The Hong Kong SFC has urged investors who use virtual asset trading platforms to start making preparations early and transition to platforms that have either already obtained operating licenses or have applied for one. Currently, the SFC has formally licensed two cryptocurrency trading operators in Hong Kong, namely OSL Digital Securities on December 15th, 2020, and HashKey Exchange on November 9th, 2022. The regulator has received license applications from a total of 22 crypto trading platforms, including four exchanges that had applied under the SFC’s previous opt-in regime for crypto trading platforms.
In addition, four other exchanges, namely Huobi HK, Meex, BitHarbour, and Ammbr, had initially applied for licenses but later either withdrew their applications or had them returned. The SFC will also maintain a public list of cryptocurrency platforms that will eventually be required to shut down in accordance with the law, with the aim of informing citizens about the associated risks.
During the shutdown period, Hong Kong will restrict the operational capabilities of these exchanges and enforce the closure of all marketing activities in the region. The Hong Kong SFC will also release a list of cryptocurrency exchanges that are deemed to be licensed as of June 1st, 2024. However, it cannot guarantee that all the mentioned platforms will be able to obtain licenses.
Once licensed by the Hong Kong SFC, these cryptocurrency exchanges will be able to onboard retail investors for trading Bitcoin (BTC) and Ether (ETH). The SFC is currently reviewing various altcoins and stablecoins for trading approval.
In other news, Hong Kong-based cryptocurrency exchange BitForex has recently gone silent after suspending withdrawals for at least three days. The exchange’s official Telegram channel has been flooded with user complaints, ranging from the inability to access their accounts to the dashboard not displaying any assets. Some users have even shared pop-up screens indicating that they are blocked from accessing the company’s website. Cointelegraph’s internal investigation has confirmed these issues.
In conclusion, Hong Kong is taking measures to regulate the cryptocurrency industry by halting license applications from crypto exchanges and requiring noncompliant platforms to shut down locally. Investors are being advised to transition to licensed platforms, and the SFC is reviewing various cryptocurrencies for trading approval. Additionally, BitForex, a Hong Kong-based exchange, is currently facing issues and has suspended withdrawals.