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- 1 Huobi HK held back its crypto exchange license request in Hong Kong.
- 2 HTX applied for the license under its local entity HBHL Hong Kong Limited and withdrew the application three days after submission.
On February 27, the Hong Kong Securities and Futures Commission (SFC) report listed exchanges that withdrew their applications for Hong Kong crypto exchange licenses. Huobi is one of the major names mentioned in the list. Ammbr, BitHarbour, and Meex are other exchanges listed in the report.
Why HTX Withdrawing From the Hong Kong Crypto Market
According to the SFC’s recent report, Huobi HK canceled its application on February 23 just after applying for the same on February 20, 2024.
On February 5, SFC warned the crypto market players to apply for a virtual asset trading platform (VATP) license by February 29. Those who will not apply for the same have to close their businesses in Hong Kong by March 31.
SFC is stepping in to build Hong Kong as a crypto hub under appropriate regulations and legislation. The governance body also promised to enhance public awareness of digital assets and ongoing investment scams to safeguard investors and crypto enthusiasts.
To become a licensed player in the Hong Kong crypto market, Huobi applied for a license and withdrew the same within three days.
HTX spokesperson said that Huobi HK operates independently from HTX. However, the main reason behind HTX’s withdrawal remained disclosed, but regulatory complexities could be a reason.
Operating in the regulatory landscape is becoming challenging for crypto exchanges mainly for the exchanges that tie to mainland China. Additionally, other exchanges also withdrew their license application recently.
What about other Crypto exchanges?
SFC’s list also included other exchanges like Ammbr, BitHarbour, and Meex which either withdrew or returned applications.
Ammbr, and BitHarbour, withdrew their applications on 6 October and January 29 respectively. Meex Digital Securities Limited, on the other hand, returned the application on February 7 for removal from the list of VATP applicants.
To date, only two crypto exchanges that are OSL and HashKey Exchange are operating in the Hong Kong market offering services to retail investors.
On January 30, OSL stated that SFC had decreased the mandated insurance coverage on cryptocurrencies to 50%. The policy covers over 20 digital assets including Solana, Ethereum, Bitcoin, Dogecoin, and Ripple along with stablecoins such as USD Coin and Tether.
Furthermore, Bitget, one of the leading players in the crypto market halted its operations in Hong Kong on December 13, 2023. The platform requested users to withdraw their assets. Moreover, the financial regulator is reviewing applications of 19 crypto exchanges including OKX, Bybit, and Crypto.com.
Hong Kong is continuously working to tighten its regulations on cryptocurrency and exchanges, mainly after the crackdown on the crypto exchange JPEX and 12 other platforms listed suspiciously on the website.
Hong Kong is emerging as a key hub for crypto exchanges, but the regulatory environment makes it challenging for exchanges to survive in the environment.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
