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Huobi Hong Kong, the local arm of crypto giant Huobi Global, has surprised the industry by pulling its application for a virtual asset trading platform (VATP) license for the second time in 2024, according to the Securities and Futures Commission (SFC) website.
This move throws a wrench into the exchange's Hong Kong ambitions as a regulatory deadline for obtaining a license approaches.
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 reasons for both withdrawals remain unclear, although speculation points towards potential difficulties meeting the SFC's strict licensing requirements.
Hong Kong has taken a cautious approach to regulating the cryptocurrency space. In 2020, the SFC introduced a licensing framework for cryptocurrency exchanges, aiming to create a safe and compliant environment for investors. This framework requires all platforms offering services to Hong Kong residents to obtain a VATP license.
Several major cryptocurrency exchanges have applied for a VATP license in Hong Kong, including OKX, Crypto.com, and Bullish. Currently, only two firms hold Hong Kong licenses: OSL and HashKey Exchange.
Blockhead
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, forced to cease operations in the region.
With the deadline approaching, Huobi Hong Kong's future in the city remains uncertain. Whether they will attempt to re-apply for a license or choose to leave the market altogether remains to be seen.
