HTX’s Huobi Withdraws Hong Kong License Application, Halts Operations

• HTX’s Hong Kong affiliate, formerly known as Huobi Global, has withdrawn its application for a virtual asset trading platform license in the city for the second time.
• The move necessitates the closure of its operations in compliance with local regulations.
• The Securities and Futures Commission (SFC) removed HBGL Hong Kong from the list of cryptocurrency exchange license applicants following the firm’s decision to withdraw its application.

HTX’s Huobi, a leading cryptocurrency exchange, has halted its operations in Hong Kong after withdrawing its license application, marking a significant development in the city’s crypto regulatory landscape.

Withdrawal of License Application

The Hong Kong affiliate of HTX, previously known as Huobi Global, has withdrawn its application for a license to operate a virtual asset trading platform (VATP) in the city for the second time. The move mandates the closure of its operations in compliance with local regulations, as per the SFC website. HBGL first submitted its application on February 20 before withdrawing it on February 23. The company resubmitted an application on February 26, just days before Hong Kong’s February 29 deadline for crypto exchanges seeking legal operation in the city.

Implications of the Withdrawal

Under Hong Kong’s new virtual asset regime, the SFC may issue a notice to a firm if it does not qualify for a “deeming arrangement,” which allows a platform to be considered licensed from June 1 while it awaits full approval. Firms that do not qualify must shut down by May 31 or within three months of being notified by the SFC, whichever is later. HTX’s affiliate HBGL is independently managed and operated, separate from HTX’s direct management and operations, according to public statements from the company.

Challenges in Obtaining a Hong Kong License

HTX is the second major cryptocurrency exchange originally from mainland China to encounter difficulties in obtaining a Hong Kong licence under the new scheme, which has proven costly and requires extensive compliance measures. Last month, HKVAEX, a local firm backed by the world’s largest crypto exchange Binance, also withdrew its Hong Kong licence application and announced its shutdown three months after applying.

Current Status of VATP License Applicants

Currently, there are 20 applicants for Hong Kong’s VATP licence, including notable names such as OKX, Crypto.com, Bybit, and Bullish. The withdrawal of HTX’s Huobi from the list of applicants highlights the challenges and complexities of navigating the city’s evolving regulatory landscape for crypto exchanges.

Conclusion

The withdrawal of HTX’s Huobi from the list of VATP license applicants in Hong Kong underscores the stringent regulatory environment in the city. As crypto exchanges continue to navigate these complexities, the landscape of the crypto industry in Hong Kong is set to undergo significant changes. The impact of these changes on the city’s position as a global crypto hub remains to be seen.