Hong Kong has announced the cessation of its licensing application process for cryptocurrency exchanges as of February 29.
With the application window now closed, exchanges operating without a license from the Securities and Futures Commission (SFC) must cease local operations by the end of May 2024.
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After the deadline, affected exchanges will see a limitation on their operations and an outright ban on local marketing activities.
With 22 applications received, the SFC is working towards a transparent ecosystem by promising to publish a list of platforms mandated to shut down. There will also be a list of crypto exchanges that will possibly be licensed, although being on the list will not guarantee approval.
Once licensed, the crypto exchanges will gain the ability to offer Bitcoin and Ether trading to retail investors, with the SFC reviewing additional cryptocurrencies for potential approval.
For the moment, there are only two approved crypto exchanges, OSL and HashKey.
The authority advises investors to switch to platforms that are either licensed or have pending applications, which are listed on their website.
With this regulation, the SFC aims to enhance investor protection and maintain the city's financial integrity.
The news comes amidst concerns within the crypto community, highlighted by the recent troubles faced by BitForex users. The Hong Kong-based crypto exchange has suspended withdrawal services and gone silent, with its website inaccessible and no updates on any social media accounts.
