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Hong Kong Crypto Exchange Gate.HK Closes Amid Regulatory Changes

May 24, 2024 at 04:26

Gate.HK, a cryptocurrency exchange based in Hong Kong, has ceased operations due to its inability to meet new licensing requirements set to take effect on June 1. The Hong Kong Securities and Futures Commission (SFC) now requires all cryptocurrency exchanges in the area to obtain an operational license, with a deadline to halt services by May 31 for those without a license.

Gate.HK initially applied for its license on February 28 but decided to withdraw the application on May 22, recognizing the need for significant modifications to its platform.

Effective May 23, Gate.HK stopped all promotional and user acquisition activities. The platform has limited user activities to fund withdrawals only, with a final cutoff for withdrawals set for August 28. Trading activities will conclude on May 28, with the permanent delisting of all tokens, including popular cryptocurrencies such as Bitcoin, Ether, Solana, Polygon, and Tether.

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The exchange plans a future relaunch after a comprehensive overhaul to align with Hong Kong’s regulatory standards, which include stringent anti-money laundering (AML) and counter-terrorism financing (CTF) protocols. “Gate.HK is committed to revamping its operations. We aim to re-enter the Hong Kong market with proper licenses and contribute to the virtual asset ecosystem,” the company stated.

This closure coincides closely with another major exchange, OKX, which also announced its exit from the Hong Kong market on May 24. OKX will stop offering centralized virtual asset trading to Hong Kong residents by May 31, 2024, although it will continue to allow withdrawals beyond this date.

Prior to the shutdown of Gate.HK, three other exchanges — Huobi HK, QuanXLab, and IBTCEX — had also retracted their license applications earlier in May.

In related regulatory news, a recent Bloomberg report revealed that the SFC is contemplating the introduction of an ETH staking option for spot Ether exchange-traded fund (ETF) issuers, potentially allowing them to earn passive income. This discussion follows recent proposals by crypto ETF issuers to include staking services, though the SFC has not yet finalized a timeline for this implementation.

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