- OKX abandons Hong Kong crypto ambitions amid regulatory hurdles.
- Strict compliance demands under new framework force exchange’s exit.
- Move signals wider industry struggle with evolving global crypto rules.
OKX, the Seychelles-based cryptocurrency platform, has withdrawn its application for a Virtual Asset Service Provider (VASP) license in Hong Kong, citing a reassessment of its business strategy. The exchange announced that, as a result, it will discontinue centralized virtual asset trading services for Hong Kong users starting May 31, 2024, to comply with local regulations.
“OKX has announced that it will withdraw its application for a Virtual Asset Service Provider (VASP) license in Hong Kong. Consequently, starting from May 31, 2024, the company will discontinue its centralized virtual asset trading services for Hong Kong users to comply with local regulations,”
As part of this shift, OKX will cease providing centralized crypto asset trading services to Hong Kong residents beginning May 31, 2024. However, the company has assured customers that their funds remain secure, as withdrawals are unaffected by the change.
Beginning June 1, 2024, OKX will only support withdrawal transactions in Hong Kong. The exchange has advised users not to make deposits after this date, as these may not be automatically credited.
Furthermore, the company stated that open orders after May 31 will be automatically canceled, with funds returned to users’ accounts. Customers are encouraged to withdraw their assets by August 31, 2024, as direct withdrawals or transfers will not be possible after this date.
Despite halting its centralized trading services, OKX maintained that it would continue to offer its Web3 services, including self-hosted wallets, in Hong Kong. This will allow users to engage in decentralized financial activities without interruption. OKX’s customer support team will be available to assist users during this transition.
The company’s decision comes amid strict regulatory frameworks and slow approval processes by the Securities and Futures Commission (SFC). Since 2022, the SFC has approved just two exchanges, underscoring the rigorous standards in place.
OKX’s decision to withdraw its VASP license application comes at a time when there is a similar pattern emerging among other cryptocurrency exchanges as well within Hong Kong. The city’s new regulatory framework, implemented in June 2023, imposes strict requirements on virtual asset service providers, including robust Know-Your-Customer (KYC) and Anti-money Laundering (AML) protocols.
While some exchanges, such as HashKey and OSL, have successfully obtained licenses under the new regime, others have found the process arduous and the requirements stringent. OKX’s withdrawal may signal a growing trend of exchanges re-evaluating their presence in Hong Kong’s evolving regulatory landscape.
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