- HTX’s Hong Kong affiliate exchange has withdrawn its application for a regional license.
- The exchange previously withdrew its initial application filed with the SFC.
- Hong Kong has set a deadline for unlicensed exchanges to cease operations.
Regulations targeting the crypto industry have recently intensified worldwide as financial authorities seek to regulate the asset class and ensure compliance by local service providers. Hong Kong has been at the forefront of this in recent months, which has recently mandated local exchanges to register with the Securities and Futures Commission (SFC) or hit the road.
Following the commission’s notice, several exchanges have initiated the process to obtain the required license, seeking to maintain operations within the jurisdiction. However, HTX’s affiliate, Huobi Hong Kong, has taken a different turn, withdrawing its application after a similar move earlier this year.
HTX’s Hong Kong Arm Withdraws Application
On Wednesday, May 15, 2024, the South China Morning Post reported that the exchange that the Hong Kong arm of crypto exchange HTX has withdrawn its application for a license to operate a virtual asset trading platform from the SFC.
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This marks the exchange’s second withdrawal, following a similar move on February 23, when it inexplicably pulled its initial application seeking licensing from the commission. While the exchange reappeared with a new submission only days later, it has once again vanished from the official SFC website and is not present among the contenders at press time.
Neither HTX nor Huobi Hong Kong has specified the reason for the withdrawal. However, as the regulatory body stated earlier this year, the exchange’s failure to obtain a license would necessitate its exit from Hong Kong.
Hong Kong Orders Exit of Unlicensed Firms
Following the expiration of the February 29 deadline provided by the re for exchanges to file licensing applications, the SFC has mandated all unregulated exchanges to cease operations within the country.
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“Virtual asset trading platforms operating in Hong Kong which have not submitted their license applications to the SFC by 29 February 2024 must close down their businesses,” the notice stated.
The exit deadline is May 31, 2024. This marks the end of operations for exchanges and service providers that fail to register and fall out of the commission’s good graces.
The SFC has also encouraged local investors to gear for the now-banned exchanges’ exit, reiterating the need to avoid unlicensed and non-compliant providers to ensure security.
On the Flipside
- Not all the pending applications with the SFC will be granted licenses.
- Other crypto exchanges, including Gate.io, OKX, and reportedly Binance through HKVAEX, are seeking licensing with the SFC.
- On April 30, 2024, Hong Kong’s inaugural Bitcoin exchange-traded funds made their debut.
Why This Matters
The reason for the withdrawal of the HTX-linked Hong Kong exchange is uncertain. While it may be seeking to adjust its filing to boost its chances of approval, the SFC’s application deadline has passed. The exchange will now have to secure its place before the exit deadline to continue operations in the region.
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