Hong Kong crypto exchange licence applicants with ties to mainland China withdraw from city
- Amid high compliance costs, an SFC notice that crypto exchanges should not serve mainland investors is prompting some firms to leave Hong Kong
- A quarter of licence applicants have withdrawn their bids so far, most with ties to China, raising questions about who will stick it out in the market
Stringent regulatory requirements and an inability to serve mainland investors is pushing global cryptocurrency exchanges out of Hong Kong, with several major firms having withdrawn their licence applications a year after scrambling to set up shop ahead of new regulations meant to transform the city into a virtual asset hub.
The local affiliates of major mainland China-linked crypto exchanges – including OKX, Gate.io, KuCoin, Binance and HTX, formerly Huobi – have all withdrawn their applications for a virtual asset trading platform (VATP) licence in Hong Kong that were submitted over the past several months, according to the Securities and Futures Commission (SFC) website.
These firms, which started in China but now have sprawling global operations, are among the largest crypto industry players to have shown interest in Hong Kong’s new virtual asset regulatory regime that started last June, which requires exchanges to be licensed in the city. Those with a pre-existing presence were granted a one-year grace period, but those that have withdrawn their applications must now shut down their Hong Kong operations.
