Huobi Global (HGBL) Hong Kong Limited, a subsidiary of HTX, withdrew its application for a cryptocurrency trading license from Hong Kong’s Securities and Futures Commission (SFC) for the second time on May 14. This decision came just two months after Huobi HK had re-submitted its application on February 26, following an initial withdrawal three days prior. Hong Kong had released a regulatory deadline that required crypto exchanges to obtain a license or cease operations in the region by the end of May if they failed to apply by February 29. To date, only two platforms, HashKey and OSL, have secured licenses from Hong Kong regulators, with the SFC still reviewing 20 remaining applications.
Despite Hong Kong’s efforts to establish itself as a crypto hub, some firms have chosen to withdraw from the market. Huobi HK’s recent withdrawal marks the second time the company has pulled its application. The lack of explanation from the SFC regarding these repeated withdrawals raises uncertainties about the exchange’s future in the region. Huobi HK’s actions are reminiscent of a similar move by crypto platform HKVAEX, which ceased operations on May 1 after withdrawing its license bid in March.
The withdrawal of Huobi HK’s HTX Hong Kong License application presents a setback for Huobi Global (HTX), a major crypto exchange that ranks among the top five globally by 24-hour trading volume. In early 2023, HTX advisor and crypto influencer Justin Sun announced the company’s plan to launch a new Hong Kong-based exchange, Huobi Hong Kong, to comply with the city’s updated crypto regulations. Huobi HK’s late February resubmission was reportedly an attempt to avoid shutting down operations on June 1, as stipulated by the new virtual asset regulatory regime implemented in 2022. The Hong Kong market was seen as an attractive location for firms with Chinese roots that relocated abroad following Beijing’s industry crackdown.
The SFC’s website indicates that numerous major global crypto exchanges, including OKX, Bybit, Bullish, and Crypto.com, are still in the process of acquiring licenses. The SFC has also issued warnings against websites falsely claiming to be regulated exchanges. Despite Hong Kong’s apparent appeal, the repeated withdrawals by firms like Huobi HK and HKVAEX raise concerns about the challenges of operating in the region under the current regulatory framework. The lack of clarity from regulators further complicates the situation for crypto exchanges looking to establish a presence in Hong Kong.
The withdrawal of Huobi HK’s license application highlights the complexities of operating in the evolving crypto regulatory landscape in Hong Kong. Huobi Global (HTX) faces challenges in expanding its operations globally, particularly in markets like Hong Kong where regulatory requirements are stringent. The decision to withdraw the license application may impact Huobi’s future plans for growth and expansion in the region. As the SFC continues to review pending applications, the uncertainty surrounding the regulatory environment in Hong Kong adds to the challenges faced by crypto exchanges seeking to establish a foothold in the market.
In conclusion, the withdrawal of Huobi HK’s license application underscores the obstacles faced by crypto exchanges operating in Hong Kong under the current regulatory framework. The repeated withdrawals by firms like Huobi HK and HKVAEX reflect the challenges of navigating the evolving regulatory landscape in the region. The lack of clarity from regulators and uncertainties surrounding the licensing process raise questions about the feasibility of conducting crypto operations in Hong Kong. As the industry continues to evolve, crypto exchanges will need to carefully consider the regulatory environment in different markets in order to effectively expand their global operations.
