June 5, 2024
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Gate.HK Overhauls for Regulatory Compliance

Hong Kong-based cryptocurrency exchange Gate.HK has ceased operations after failing to meet local licensing requirements set to be enforced starting June 1. The Hong Kong Securities and Futures Commission (SFC) mandated that all crypto exchanges in the region obtain an operational license. Exchanges that did not apply for a license were required to halt their services by May 31.

List of applicants whose license applications have been returned, refused or withdrawn. Source: SFC

Withdrawal of License Application and Platform Overhaul

In response to the new regulations, Gate.HK submitted its license application to the SFC on February 28. However, the exchange withdrew its application on May 22, citing the need for a “major overhaul” of its trading platform. Consequently, as of May 23, Gate.HK stopped all activities related to acquiring new users and marketing. Existing users are now unable to make deposits and are limited to withdrawing funds until August 28.

Gate.HK plans to completely shut down its trading platform on May 28, at which point all tokens will be permanently delisted. The list of tokens includes Bitcoin (BTC), Ether (ETH), Solana (SOL), Polygon (MATIC), and Tether (USDT), among others.

The exchange intends to relaunch its services only after restructuring its platform to comply with Hong Kong’s regulatory requirements, which include establishing Anti-Money Laundering and Counter-Terrorist Financing measures. The company stated:

“Gate.HK is actively working on the aforementioned overhaul. We plan to resume our business in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses.”

Broader Industry Impact and Regulatory Developments

Before Gate.HK’s exit, three other exchanges—Huobi HK, QuanXLab, and IBTCEX—also withdrew their license applications in May. In total, nine crypto exchanges have withdrawn their applications in Hong Kong. As of May 24, twenty cryptocurrency exchanges remain active applicants for Hong Kong’s crypto license.

A recent Bloomberg report highlighted that the SFC is considering allowing spot Ether exchange-traded fund (ETF) issuers to include an ETH staking option, enabling them to generate passive income. The SFC reportedly discussed providing staking services via licensed platforms with the country’s crypto ETF issuers after reviewing proposals in recent weeks.

The financial regulator is currently discussing these developments, with no set timeline for implementation.

Image by master1305 on Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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