Crypto Exchanges Exit Hong Kong as SFC Tightens Grip

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Key Takeaways

  • Six crypto exchanges left the Hong Kong market in May alone
  • As of June 1, operating an unlicensed virtual asset trading platform (VATP) in Hong Kong is a criminal offence,

Global cryptocurrency exchanges are exiting Hong Kong owing to the stringent regulatory requirements set by the Securities and Futures Commission (SFC). As of June 1, operating an unlicensed virtual asset trading platform (VATP) in Hong Kong is a criminal offense, and the SFC is actively enforcing this rule.

Crypto exchanges that failed to apply for an operational license with SFC by February 29 are now required to cease operations immediately. To minimize investor risks, Hong Kong regulators mandated that exchanges either secure a license or shut down within three months.

During this period, over 22 cryptocurrency exchanges applied for licenses. However, a staggering six crypto exchanges withdrew their applications and left the Hong Kong market in May alone, including bigwigs such as OKX and Huobi HK.

Several affiliates of major mainland China-linked crypto exchanges, including OKX,, KuCoin, Binance, and HTX (formerly Huobi), have also withdrawn their VATP license applications in Hong Kong. Firms with an existing presence were granted a one-year grace period, but those that withdrew must now shut down their Hong Kong operations.

Seven of the original 24 applicants withdrew their application, citing regulatory pressure. One of the SFC’s requirements that has triggered the mass withdrawal is the regulatory body’s mandate that prevents mainland Chinese residents from accessing VATPs in HongKong

Earlier this month, Gate.HK ceased all activities related to acquiring new users and marketing, prevented existing users from making deposits, and began delisting tokens on May 23. The exchange now plans to relaunch services after restructuring its platform to meet Hong Kong’s regulatory requirements.

Currently, only OSL Digital Securities Limited and Hash Blockchain Limited have been granted licenses to operate in Hong Kong. Some of the exchanges that withdrew their applications include local operations affiliated with leading crypto firms, such as HKVAEX (a Binance affiliate) and Huobi HK.

Both Binance and HTX have stated that these exchanges operate independently. As of now, 18 VATP applicants remain on the SFC’s official list, with notable names like, Bullish, and Bybit among them.

The latest development comes amid reports that SFC is considering allowing spot Ether exchange-traded fund issuers to include an ETH staking option. The regulatory body has also been discussing providing staking services via licensed platforms with the country’s crypto ETF issuers after receiving proposals in recent weeks.

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Saniya Raahath
Saniya Raahath

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