May 23, 2024
By Sharan Kaur Phillora
Hong Kong’s stringent licensing regulations for crypto exchanges have led to a significant number of withdrawals, with seven exchanges, including IBTCEX and Huobi HK, pulling their applications ahead of the May 31 deadline. The Securities and Futures Commission of Hong Kong (SFC) has enforced these regulations, requiring all non-compliant exchanges to cease operations by the end of May.
Here’s what we know:
The recent withdrawals highlight the challenges faced by these exchanges. On May 13, IBTCEX and QuanXLab withdrew their applications, followed by Huobi HK the next day. The reasons behind these withdrawals remain undisclosed on the SFC’s website. This reduction leaves 21 exchanges still in the running for licenses, including major players like Bybit, Crypto.com, and OKX.
Hong Kong’s efforts to become a regulated digital asset exchange hub have seen mixed reactions. While 24 companies initially applied for licenses, major exchanges like Binance and Coinbase opted out, indicating possible concerns about the regulatory environment. The cost and complexity of the new licensing regime, which could reach up to $20 million, have been cited as potential deterrents.
In addition to these developments, the Hong Kong Monetary Authority (HKMA) has launched a pilot program for the digital yuan, expanding its use beyond mainland China. Hong Kong residents can now create e-CNY wallets with just their mobile numbers, facilitating cross-border payments.
As the May 31 deadline approaches, the SFC will publish a list of compliant exchanges. This transparency aims to protect investors and ensure a robust regulatory framework for digital assets in Hong Kong.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
