- The Hong Kong SFC (Security and Futures Commission) issued a warning for crypto exchanges to apply for a virtual asset trading license by February 29 or get shut down.
- Crypto exchanges who failed to apply for the trading license will wind up their businesses in the city by May 31st.
- As of the deadline, only 24 crypto exchanges applied for licenses to trade virtual assets in the city.
The Hong Kong Security and Futures Commission had earlier mandated all VATPS (Virtual Asset Trading Platforms) that wish to keep operating in the city to apply for virtual asset trading licenses to legitimise their operations and protect investors’ funds. The Commission set a Feb. 29 deadline for all virtual asset trading license applications and mandated all exchanges to apply or face packing up by May 31. Investors were also urged to “check the regulatory status” of virtual asset trading platforms and only engage with SFC-licensed exchanges.
Virtual Asset Trading Platforms Who Didn’t Apply For a License Will Pack Up By May 31st
As Hong Kong looks to establish itself as a cryptocurrency haven, the city’s top securities regulator is keen on expelling all exchanges or virtual asset service providers who’ve failed to comply with regulatory guidelines. Per its AMLO (Anti-Money Laundering and Counter-Terrorist Financing Ordinance), the city’s regulator is giving a window between March 1st and May 31st for all VATPs who have been operating in the country before June 1, 2023, to make the necessary “transitional arrangements.”
The AMLO also considers it a “criminal offence” for any VATP to continue operating within Hong Kong without an SFC on or after June 1, 2024. It’s worthy of note that not all license applicants will be approved for trading as the SFC may return, refuse, or revoke their application – an outcome that will require affected VATPs to pack up from Hong Kong and be placed on the list of closing-down virtual asset trading platforms. Investors are advised to always check the list to avoid putting their funds in jeopardy.
Only 24 Virtual Asset Trading Platforms Have Applied for an SFC License; Top Exchanges Missing
There are currently 24 crypto exchanges that have applied for the SFC License, according to data from the SFC’s website. The most prominent of these platforms include Crypto.com, Bybit, and OKX. So far, only two exchanges have been given licenses by the SFC to operate in the region, namely; OSL Exchange and HashKey Exchange, as per the SFC. Four virtual asset companies have their licenses returned, refused, or returned.
Meanwhile, it’s baffling that some of the most prominent cryptocurrency exchanges did not make the SFC’s list of virtual asset trading platform applicants. Companies like Binance, Coinbase, and Kraken were nowhere to be found on the list, raising suspicions about the cryptocurrency regulatory landscape in Hong Kong. Sources are speculating the licensing and regulatory requirements might have been overarching for these giant exchanges, which might explain why they easily chose to opt out.