Update as of May 24, 12:50 pm UTC: Gate.HK, a cryptocurrency exchange based in Hong Kong, has shut down its operations due to its failure to meet the upcoming local licensing requirements set to be enforced from June 1.
In order to obtain an operational license, all crypto exchanges in Hong Kong were mandated by the Hong Kong Securities and Futures Commission (SFC) to apply for one. Failure to do so would result in the suspension of their services by May 31.
Gate.HK had submitted its license application to the SFC on February 28, but on May 22, the exchange decided to withdraw its application, stating the need for a “major overhaul” of its trading platform.
As of May 23, Gate.HK has ceased all activities related to acquiring new users and marketing. Existing users are only able to withdraw funds until August 28, with deposits no longer being accepted. On May 28, the trading platform will be completely shut down, resulting in the permanent delisting of all tokens, including Bitcoin (BTC), Ether (ETH), Solana (SOL), Polygon (MATIC), and Tether (USDT), among others.
Gate.HK plans to relaunch its services after reconstructing its platform to meet Hong Kong’s regulatory requirements, which include implementing measures to combat money laundering and terrorist financing.
This news comes just one day before another major global exchange, OKX, announced its withdrawal from Hong Kong on May 24. OKX will stop providing centralized virtual asset trading services to Hong Kong residents by May 31, 2024.
Prior to Gate.HK, three other exchanges, namely Huobi HK, QuanXLab, and IBTCEX, also withdrew their license applications in May.
In a recent report, Bloomberg revealed that the SFC is considering allowing spot Ether exchange-traded fund (ETF) issuers to offer an ETH staking option, which would enable them to generate passive income. The SFC has been discussing this possibility with crypto ETF issuers, but there is currently no timeline for implementation.
It appears that the SFC is facing a tough battle against the legal firepower of the crypto industry, akin to the epic clash between Godzilla and Kong.