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Gate.HK Shuts Down After Failing to Meet Hong Kong’s New Crypto Licensing Requirements

Hong Kong-based cryptocurrency exchange Gate.HK has shut down after failing to meet the upcoming local licensing requirements set to take effect on June 1.

The Hong Kong Securities and Futures Commission (SFC) mandated that all crypto exchanges in the region acquire an operational license, requiring those that failed to apply to cease services by May 31.

Gate.HK applied for a license on February 28, but withdrew the application on May 22, citing the need for a “major overhaul” of its trading platform.

As of May 23, Gate.HK has stopped acquiring new users and ceased all marketing activities.

Current users can no longer make deposits and are only able to withdraw funds until August 28.

The exchange will permanently delist all tokens, including Bitcoin, Ether, Solana, Polygon (MATIC), and Tether (USDT), on May 28, effectively shutting down its trading platform.

Gate.HK plans to relaunch its services once its platform is reconstructed 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.

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“We plan to resume our business in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses.”

The closure of Gate.HK coincides with the announcement of another major global exchange, OKX, which stated on May 24 that it would exit the Hong Kong market.

OKX will cease providing centralized virtual asset trading services to Hong Kong residents by May 31, 2024.

The announcement reassured customers, saying, “Customer funds remain safe, and withdrawal services will not be affected. After May 31, 2024, customers can only withdraw.”

Prior to Gate.HK’s exit, three other exchanges — Huobi HK, QuanXLab, and IBTCEX — also withdrew their license applications in May.

Additionally, a recent Bloomberg report indicated that the SFC is considering allowing spot Ether exchange-traded fund (ETF) issuers to include an ETH staking option to generate passive income.

The SFC is currently discussing providing staking services via licensed platforms with the country’s crypto ETF issuers, although no timeline for implementation has been set.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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