- The grace period for unregistered crypto exchanges in Hong Kong has expired.
- The Hong Kong SFC has outlined the list of unauthorized platforms.
- Compliance standards across the region are tightening.
Crypto regulations in Hong Kong are undergoing an overhaul as the region’s financial watchdog tightens oversight on service providers. In February 2024, the commission mandated that all exchanges seeking to operate within the region acquire official operational licenses or risk shutdown.
With the grace period ending in May, the commission has ordered all unlicensed entities to cease operations.
Unlicensed Crypto Firms to Exit Hong Kong
As of Friday, May 31, 2024, the deadline has expired for exchanges to operate in Hong Kong without the necessary licenses.
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The expiration mandates that all unlicensed exchanges, including those with refused or withdrawn license applications, cease operations within the region, except for activities solely related to winding down their businesses.
“During the closing down period, these platform operators are not allowed to provide their services except when such an act is done solely for the purpose of closing down their businesses,” the website read.
The impacted exchanges include Bybit, GateHK, OKX, Huobi Hk, among others. Effective immediately, these exchanges must also cease all promotional activities to investors within the region. The SFC is also tightening regulations for license applicants.
Hong Kong Tightens Regulatory Scrutiny
According to a recently released statement, the SFC will require deemed-to-be-licensed crypto exchanges in Hong Kong to fully comply with several pre-licensing conditions.
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These include engaging external assessors to review the effectiveness of their systems and welcoming authorized officials for physical screenings and inspections to ensure compliance with regional regulatory standards.
“The SFC will conduct on-site inspections to ascertain their compliance with the SFC’s regulatory requirements, with a particular focus on their safeguarding of client assets and know-your-client processes,” stated the commission.
Additionally, if the commission deems it necessary, it may refuse licenses to such crypto service providers, requiring them to wind down operations and exit the Hong Kong market.
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