OKX withdrew its license application to provide virtual asset services in Hong Kong and plans to discontinue centralized virtual asset trading services for users in the region. In a statement on its website, the cryptocurrency exchange said that it withdrew its VASP license application and will discontinue centralized virtual asset trading services for Hong Kong residents effective May 31, 2024.

Navigating Regulatory Compliance

Despite this move, OKX HK has assured users of the safety of their funds as withdrawal services remain unaffected. The company said that the decision to withdraw the license application followed a comprehensive evaluation of its business strategy. By terminating centralized virtual asset trading services, OKX HK aims to effectively navigate regulatory compliance while prioritizing customers' interests.

Users in Hong Kong have until August 31, 2024, to withdraw assets from their OKX accounts. During the transition period, they can transfer funds to self-custody wallets or third-party platforms. The exchange has urged customers to initiate withdrawal requests before the closure date to ensure a seamless transition.

After the deadline, OKX HK will treat any remaining balances in customer accounts as unclaimed property in accordance with its terms of use. The exchange advised users to stay updated on further developments and adhere to the provided guidelines to effectively manage their assets post-closure.

OKX's action followed a similar decision by Huobi Hong Kong, an affiliate of HTX, formerly known as Huobi Global, that recently withdrew its application for a license to operate a virtual asset trading platform in Hong Kong. This marked the second time the company has suspended its pursuit of regulatory approval, The South China Morning Post reported.

Crypto Exchanges Grapple with Regulatory Pressure in Hong Kong

Huobi Hong Kong did not specify the reason for withdrawing its license application, leading to speculation about the regulatory pressure it may have encountered. After its latest withdrawal, the Securities and Futures Commission (SFC) removed HBGL Hong Kong Limited from the list of cryptocurrency exchange license applicants.

The withdrawal happened amid Hong Kong's new virtual asset regime, which imposes stringent requirements on cryptocurrency exchanges seeking licenses. Failure to meet these criteria results in mandatory closure within three months of the SFC's notification.

Huobi HK's withdrawal of license application is not an isolated incident in Hong Kong's crypto market. HKVAEX, backed by Binance, also recently withdrew its license application, highlighting the complexities and costs associated with regulatory compliance in the region. With only a few applicants remaining for Hong Kong's VATP license, the industry faces ongoing uncertainty and regulatory scrutiny.