OKX, a major cryptocurrency exchange, recently announced that it would be discontinuing its centralized cryptocurrency trading services for residents of Hong Kong effective May 31, 2024. This decision came as a result of the exchange withdrawing its virtual asset service provider (VASP) license application. While OKX cited “careful consideration” of its business strategy as the reason behind this move, specific details were not provided in the official announcement. Despite the cessation of trading services, OKX assured customers that their funds would remain secure, and withdrawal services would continue to function normally.
After May 31, 2024, customers based in Hong Kong will only be able to withdraw their funds from the platform. Trading and deposit services will no longer be available to them. However, OKX’s Web3 self-hosted wallet services will remain accessible to Hong Kong users and will not be affected by the changes. The exchange advised users to refrain from making any deposits into their OKX accounts after the specified deadline. Additionally, any open orders that are not closed by the discontinuation date will be canceled, and the resulting funds will be transferred to the users’ OKX account balance.
OKX had submitted its application for a virtual asset service provider (VASP) license to the Hong Kong Securities and Futures Commission on November 16th. However, the exchange decided to withdraw its application on May 24th, as confirmed on the SFC’s website. The reasons behind this withdrawal were not disclosed by OKX. It is noteworthy that several other cryptocurrency exchanges, including the Hong Kong subsidiaries of HTX and Huobi, also withdrew their VASP license applications with the SFC around the same time. Currently, only two cryptocurrency exchanges, OSL Digital Securities Limited and Hash Blockchain Limited, have been approved by the regulator to operate legally in Hong Kong.
The decision to discontinue trading services in Hong Kong follows a similar move by OKX in India. In March, the cryptocurrency exchange informed its Indian users that it would be ceasing its services in the country due to increasing regulatory scrutiny. Indian users were advised to close out their positions by the end of April. This action was in response to the Indian government’s crackdown on global crypto exchanges operating within the country, leading to several entities halting their operations in India.
OKX’s decision to cease centralized virtual asset trading services in Hong Kong reflects the challenges and regulatory pressures faced by cryptocurrency exchanges operating in various jurisdictions. As the regulatory landscape continues to evolve, exchanges must adapt their business strategies to comply with the changing requirements to ensure the security and legality of their operations.
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