Here’s Why Binance, OKX Withdew Licensing Applications In Hong Kong

Bhushan Akolkar
June 2, 2024
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Highlights

  • Prominent exchanges such as Binance, Huobi, and OKX have withdrawn applications from Hong Kong's SFC.
  • Industry insiders criticized the authorities for being overly cautious and conservative for new licensing system.
  • The author highlights that the development of Hong Kong's crypto policies remain fragmented.

Hong Kong’s ambitions to become the most-desired destination for Web3 and crypto seem to be taking a backseat as some of the top global exchanges have withdrawn their licensing applications from Hong Kong’s Securities and Futures Commission (SFC).

Global Exchanges Withdraw from Hong Kong

As per the local news report, some of the top global exchanges like Binance, Huobi, and OKX have decided to withdraw their application during the last week of May. A total of 11 exchanges have withdrawn their applications leaving only 11 applicants on the list.

The Hong Kong SFC mandates that all applicants for virtual asset trading platform licenses sign a letter of commitment, ensuring they do not have mainland Chinese users in any region. This requirement poses a significant challenge for traditional offshore exchanges. OKX attempted to form an industry alliance to contest this stipulation but was ultimately unsuccessful.

Some of the industry insiders noted that the withdrawn entity could revise its legal entity or framework and reapply in the future. However, it should not use a brand similar to that of offshore exchanges in its application.

Are HK’s Web3 Ambitions Over?

With OKX exiting Hong Kong, many in the crypto community have started questioning whether Hong Kong’s Web3 ambitions are over.

Several individuals in Hong Kong’s WeChat circles have accused the authorities of timidity and excessive caution when implementing the new system. They argue that the authorities’ conservative and risk-averse approach, rooted in traditional financial thinking, has weakened the competitiveness and flexibility of the licenses. Consequently, some operators decided to withdraw their applications at the final stage, despite having invested substantial resources and upfront costs.

The author noted several areas of concern with the new licensing system. Firstly, various policies and measures related to the development of Hong Kong’s virtual asset market—such as VATP, stablecoin issuance, and virtual asset over-the-counter trading—were designed by different departments without cohesive strategic considerations for industrial development.

These policies entered the consultation stage or legislative process at different times, leading to a phased completion of the entire Web3 layout. This protracted process has struggled to keep pace with the rapid evolution of technology.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.