Hong Kong-based cryptocurrency exchange Gate.HK has announced its closure after failing to meet the upcoming local licensing requirements set to be enforced from June 1 onwards. The Securities and Futures Commission (SFC) of Hong Kong mandates that all cryptocurrency exchanges operating in the region must obtain proper operating licenses. Failure to do so requires exchanges to halt their services by May 31.
In line with this mandate, Gate.HK had submitted a license application to the Securities and Futures Commission on February 28. However, the exchange decided to withdraw its application on May 22, citing the necessity for a significant overhaul of its trading platform. Consequently, Gate.HK ceased all activities related to acquiring new users and marketing as of May 23. Existing users are restricted from making deposits until August 28 and can only withdraw funds during this period.
Gate.HK is set to close its trading platform on May 28, with all listed tokens, including Bitcoin, Ethereum, Solana, Polygon, and Tether, to be permanently delisted. The exchange plans to relaunch its services only after rebuilding its platform to comply with regulatory requirements in Hong Kong, which involve developing robust anti-money laundering and counter-terrorism financing measures.
The company emphasized its commitment to rectifying its operations, stating its intention to resume business in Hong Kong in the future upon obtaining relevant licenses. Gate.HK aims to contribute positively to the virtual asset ecosystem once it meets the regulatory standards set by the Securities and Futures Commission. The decision to shut down Gate.HK comes shortly after another major global exchange, OKX, announced its withdrawal from Hong Kong, effective May 24, ceasing centralized virtual asset trading services to residents by May 31, 2024.
The exit of Gate.HK follows similar actions taken by three other exchanges – Huobi HK, QuanXLab, and IBTCEX – which also withdrew their license applications in May. Additionally, there have been discussions within the Securities and Futures Commission regarding the inclusion of ETH staking options for issuers of spot Ethereum exchange-traded funds (ETFs). While proposals have been submitted in recent weeks, financial regulators are still deliberating on the matter, with no specific implementation timeline announced yet.
