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Hong Kong crypto exchanges face shutdown deadline

TL;DR

  • Crypto exchanges in Hong Kong must get licenses by May 31 or shut down, with regulators tightening rules.
  • Users of BitForex face problems with withdrawals and access as the exchange remains unresponsive.
  • The SFC advises investors to switch to licensed exchanges as unlicensed ones face closure.

Hong Kong’s Securities and Futures Commission (SFC) has warned cryptocurrency exchanges operating without proper licensing in the region. As of February 29, exchanges that failed to file for licenses must initiate winding up procedures, with a final deadline of May 31, 2024.

Regulatory crackdown and compliance measures

The SFC’s directive signals a tightening of regulatory oversight within the cryptocurrency industry in Hong Kong. With the cessation of license applications as of February 29, the onus now falls on non-compliant trading platforms to obtain necessary licenses or cease operations within the mandated timeframe.

In light of these developments, the SFC advises investors utilizing virtual asset trading platforms to make early preparations. Users are encouraged to transition their holdings to licensed operators or those in the process of obtaining licenses to ensure compliance with regulatory requirements.

Licensed operators and application status

Hong Kong currently boasts two formally licensed crypto trading operators: OSL Digital Securities and HashKey Exchange. Additionally, the SFC has received applications from 22 trading platforms, reflecting a substantial interest in regulatory compliance within the industry.

Among the applicants, several exchanges either withdrew their applications or had them returned, including prominent names like Huobi HK, Meex, BitHarbour, and Ammbr. The impending closure deadline underscores the regulatory pressures faced by non-compliant exchanges, with stringent measures expected to be enforced during the wind-up period.

Operational limitations and marketing restrictions

During the wind-up period, non-compliant exchanges will face operational limitations and be required to cease all marketing activities within Hong Kong. The SFC aims to mitigate associated risks by publicly maintaining a list of exchanges subject to closure, ensuring transparency for investors and stakeholders.

Once licensed by the SFC, crypto exchanges gain the ability to onboard retail investors, facilitating trading activities for popular cryptocurrencies such as Bitcoin (BTC) and Ether (ETH). Furthermore, the SFC is actively reviewing various altcoins and stablecoins for trading approval, expanding the scope of permissible assets within regulated exchanges.

BitForex users encounter operational challenges

In a separate development, Hong Kong-based crypto exchange BitForex has come under scrutiny following reports of operational disruptions. Users have reported difficulties accessing their accounts, with withdrawal functionalities suspended for at least three days. The exchange’s official communication channels have remained inactive, exacerbating concerns among its user base.

BitForex’s X account has not been updated since May 2023, raising questions about the exchange’s operational status. Users have encountered issues ranging from login failures to discrepancies in asset displays on the platform. An internal investigation by Cointelegraph confirmed the presence of these operational challenges, indicating a broader concern regarding the exchange’s functionality.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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James Kinoti

A crypto enthusiast, James finds pleasure in sharing knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. The latest innovations in the crypto industry, crypto gaming, AI, blockchain technology, and other technologies are his preoccupation. His mission: be on track with transformative applications in various industries.

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