Leading Crypto Exchanges Withdraw License Applications from Hong Kong SFC

• Exchanges, including OKX, Huobi, and Binance, have reportedly chosen to withdraw.
• There are now just 11 applicants on the list after 11 exchanges withdrew their bids in total.

Several of the biggest international exchanges have withdrawn their applications for licenses from Hong Kong’s Securities and Futures Commission (SFC), seemingly undermining Hong Kong’s hopes of becoming the most sought-after location for Web3 and cryptocurrency.

Exchanges, including OKX, Huobi, and Binance, have reportedly chosen to withdraw their applications in the final week of May, according to a local news report. There are now just 11 applicants on the list after 11 exchanges withdrew their bids in total.

Struggle Continues

All applicants for licenses to operate virtual asset trading platforms must sign a letter of commitment from the Hong Kong SFC guaranteeing they do not have any mainland Chinese users in any region. Traditional offshore exchanges are facing a big problem as a result of this regulation. OKX made a vain attempt to create an industry coalition in order to challenge this requirement.

Industry insiders pointed out that the withdrawn firm can change its framework or legal status and submit a new application later on. On the other hand, its application shouldn’t employ a brand that sounds like an offshore exchange. Since OKX left Hong Kong, many in the cryptocurrency world have begun to wonder if Hong Kong’s aspirations to become a Web3 hub are already in the past.

The community has accused the authorities of being overly cautious and hesitant when introducing the new system. They contend that the competitiveness and flexibility of the licenses have been undermined by the regulators’ cautious and risk-averse stance, which is based on conventional financial theory. As a result, some operators chose, in the end, to withdraw their applications, even after making significant upfront investments and resource commitments.

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