Hong Kong Securities and Futures Commission (SFC) has issued an important warning to cryptocurrency exchanges in the region. The SFC reminded exchanges operating in the Chinese special administrative region that if they do not apply for a license, they will have to cease operations by May 31, 2024.
Final Date for Crypto Exchanges: February 29, 2024
The SFC has warned crypto exchanges to apply for licenses to continue their operations. The SFC emphasized that cryptocurrency exchanges operating in the Chinese special administrative region must apply for a license by or before February 29, 2024.
The Hong Kong regulator stated that cryptocurrency exchanges that do not apply for a license by February 29, 2024, will have to cease their operations in Hong Kong by or before May 31, 2024.
Licensing Process for Crypto Exchanges Began in 2023
As is known, Hong Kong took action in 2023 for exchanges where cryptocurrency trading is conducted and initiated the licensing application process for crypto exchanges on June 1, 2023. SFC CEO Julia Leung had stated at the time that this step was supported by a comprehensive regulatory framework aimed at protecting investors and managing risks.
Crypto exchanges wishing to obtain a license need to fulfill various requirements, such as a minimum capital of 5 million Hong Kong dollars (638 thousand US dollars), implementation of anti-money laundering measures, and appointment of experienced managers. Initially, it was reported that over 80 companies had applied for a license to operate as a cryptocurrency exchange from the SFC. The world’s largest cryptocurrency exchange by volume, Binance, is among the crypto exchanges that have applied for a license in Hong Kong with its established VAEXC exchange.
Experts believe that companies are particularly turning to Hong Kong due to the prohibition of providing services related to cryptocurrencies in mainland China, and the region is a candidate to become a crypto hub as targeted.
