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Gate.HK, OKX, Huobi: Hong Kong is Losing Crypto Exchanges

Gate.HK, OKX, and Huobi have al pulled their applications for virtual-asset trading platform licenses (VATP) in Hong Kong

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Hong Kong is seeing a string of crypto platforms take a step back from the city, despite its best efforts to become a regional crypto hub.

OKX is the latest to withdraw its application for a virtual-asset trading platform license (VATP), following in the footsteps of Gate.HK and Huobi.

Last week, OKX announced it would be withdrawing its digital asset application. "After careful consideration of our business strategy, we've decided to withdraw OKX HK's VASP license application at this time," the exchange said.

OKX, which is the second-biggest crypto exchange by volume, said it will cease providing centralized virtual asset trading in Hong Kong by 31 May. Users will only be able to withdraw their funds after that date.

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Last week, Gate.HK, the Hong Kong arm of cryptocurrency exchange, announced the withdrawal of its VATP.

"We will be undergoing a major overhaul of our current platform, along with potential development of new services and products in the near future," Gate.HK said in a statement. "Consequently, we are withdrawing our application to be licensed for Types 1 and 7 regulated activities."

The platform will cease trading on 28 May and is advising its users to withdraw their assets before 28 August 2024.

However, Gate.HK's move isn't goodbye forever. "We plan to resume our business in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses," the firm stated.

Earlier this month, Huobi Hong Kong, the local arm of crypto giant Huobi Global, pulled its application for a virtual asset trading platform license for the second time in 2024.

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This withdrawal comes amidst a crucial period for Hong Kong’s cryptocurrency industry, with a regulatory deadline looming for exchanges to obtain a license or cease operations.

Huobi Hong Kong's decision to withdraw its application for the second time raises questions about the exchange's commitment to the Hong Kong market. The first withdrawal occurred in February 2024, just three days after the initial application was submitted.

The string of withdrawals throws a wrench into the exchange's Hong Kong ambitions as a regulatory deadline for obtaining a license approaches.

The clock is ticking for Hong Kong-based crypto exchanges. The SFC has set a firm deadline of August 2024 for all platforms to secure a VATP license. Those failing to do so will be shown the door, and forced to cease operations in the region.

There currently remain 19 applicants for Hong Kong’s virtual-asset platform licence, including, Bybit and Bullish. Two exchanges, Hashkey Exchange and OSL Exchange, have been approved to serve retail investors.