Hong Kong concludes initiative to accept applications for cryptocurrency exchange licenses

Hong Kong has ceased accepting applications for licenses from cryptocurrency exchanges, and noncompliant platforms will soon be required to shut down their operations locally. The Securities and Futures Commission (SFC) of Hong Kong has stated that any crypto exchanges in the city that have failed to file for license applications must wind up their business by May 31, 2024. The SFC has urged investors using virtual asset trading platforms to prepare early and migrate to platforms that have either already obtained operating licenses or have applied for them. The SFC has granted licenses to two crypto trading operators in Hong Kong: OSL Digital Securities and HashKey Exchange. The regulator received license applications from 22 crypto trading platforms, including four that had applied under the SFC’s previous opt-in regime. Four other exchanges, including Huobi HK and Meex, initially applied for licenses but later withdrew or had their applications returned. The SFC will maintain a public list of crypto platforms that will eventually be required to close down by law in order to inform citizens about the associated risks. During the closure period, Hong Kong will restrict the operational capabilities of the exchanges and enforce the closure of all marketing activities in the region. The SFC will also release a list of licensed crypto exchanges as of June 1, 2024, but does not guarantee licenses for all mentioned platforms. Once licensed by the SFC, crypto exchanges will be able to onboard retail investors for trading Bitcoin and Ether, with various altcoins and stablecoins currently under review for trading approval. BitForex, a Hong Kong-based crypto exchange, has recently gone silent after suspending withdrawals for at least three days. The exchange’s X account has not been updated since May 2023, and users have reported various issues with their accounts, including being unable to access them and the dashboard not displaying any assets. Some users have been blocked from accessing the company’s website.