The trend of VASP license application withdrawal and returns did not end as the exchanges continued to exit from the Hong Kong market. On May 24, Gate.io and OKX HK snatched their hands from Virtual Asset Service Provider (VASP) license applications, confirmed Securities and Futures Commission (SFC).
Gate.io & OKX HK Announced Withdrawal
On May 24, the SEC revealed the list of licensed, returned, and withdrawn virtual asset trading platforms. Gate.io and OKX HK emerged as new members who recently withdrew their applications.
The SFC report also mentions that Hong Kong VAEXC Limited (VAEX) withdrew its application on May 24.
Altcoin Alerts took to X to share OKX HK and Gate.io’s upcoming moves.
After @Binance and @gate_io, @okx Exchange Announces Withdrawal of OKX HK's VASP License Application !#OKX HK has decided to withdraw its #VASP license application and will cease centralized virtual asset trading services for #HongKong residents by May 31, 2024. Customer… pic.twitter.com/89HKQz2MO7
— Altcoin Alerts (@Altcoin_Alerts) May 24, 2024
Both exchanges snatched hands from the VASP license application and decided to cease its services in the Hong Kong market.
As per the report, OKX HK will cease its operations by May 31 and advised users to withdraw their funds before August 31. gate.io, alternatively, closing its services by May 28.
The SFC’s upcoming regulatory changes that would halt registration of users, deposits, and marketing activities could be the major reason behind the exit.
Total Returns and Withdrawals to Date
As per the SFC notice, exchanges that haven’t submitted their license applications by 29 February 2024 must close their businesses in Hong Kong. 31 May 2024 is set as the last deadline for the exit.
As per the latest data, OSL Exchange and HashKey Exchange are the only exchange holdings licensed by the SFC. On the other hand, 11 businesses either withdrew or returned their license applications.
List of applicants whose license applications have been withdrawn I Source: SFC HK
Before OKX HK and Gate.io, Huobi HK and QuanXLab also withdrew their applications on May 14 and May 13, respectively. The withdrawn list includes some prominent players like Ammbr, BitHarbour, IBTCEX, Meex, etc.
Moreover, OKX and Gate.io submitted their license applications on 16 November 2023 and 28 February 2024, respectively. Furthermore, Hong Kong VAEXC Limited submitted its application on 25 November 2023 and withdrew it on 24 May 2024.
Will it Affect the Hong Kong Crypto Market?
Hong Kong positioned itself as a prominent player in the crypto and Web3 space with its recent advances in the Crypto Travel Rule and legislative infrastructure.
The launch of Bitcoin and Ethereum ETFs in Hong Kong showcases the growing acceptance of crypto in the region, whereas the exit of exchanges may affect the local crypto market. The market may experience a decline in liquidity due to fewer exchange operations.
Furthermore, residents may have limited access to specific cryptocurrencies, which may decrease their interest in the crypto space.
