Starting from February 29, Hong Kong ceased accepting license applications for cryptocurrency exchanges, signaling a significant shift in its regulatory approach to the crypto industry. The decision by the Hong Kong Securities and Futures Commission (SFC) mandates that all local cryptocurrency exchanges failing to submit license applications must cease operations by May 31, 2024. The SFC is urging investors utilizing virtual asset trading platforms to make early preparations and transition to licensed or application-pending platforms to ensure compliance.
Notably, the SFC had previously granted licenses to two cryptocurrency trading operators in Hong Kong: OSL Digital Securities on December 15, 2020, and HashKey Exchange on November 9, 2022. Despite receiving applications from 22 cryptocurrency trading platforms, including four exchanges, some, such as Huobi HK, Meex, BitHarbour, and Ammbr, either withdrew their applications or had them returned. This marks a departure from the SFC's previous opt-in regime for cryptocurrency trading platforms.
In a bid to inform citizens about associated risks, the China Securities Regulatory Commission will maintain a public list of cryptocurrency platforms that will eventually need to cease operations under the law. Throughout the shutdown process, Hong Kong will enforce limitations on exchange operational capacity and cease all marketing activities within the region. Furthermore, the SFC plans to publish a list of cryptocurrency exchanges deemed to have obtained licenses as of June 1, 2024, although this does not guarantee licensing approval for all listed exchanges.
Once licensed by the Hong Kong Securities and Futures Commission, cryptocurrency exchanges will be permitted to facilitate retail investors' trading activities in major cryptocurrencies like Bitcoin and Ethereum. The Securities and Futures Commission is currently evaluating various altcoins and stablecoins for trading approval. Amidst regulatory developments, Hong Kong-based cryptocurrency exchange BitForex faced scrutiny after suspending withdrawals for at least three days. Concerns were raised by users reporting issues accessing their accounts and encountering obstacles on the exchange's website, underscoring ongoing challenges within the industry.
