The company urged users of the platform to withdraw their assets before August 28, as it plans to delist all tokens.
Gate.io, a crypto exchange platform, announced that it would cease operations of its Hong Kong-based entity, Gate HK, and it has also officially withdrawn its license application to operate a cryptocurrency trading platform in the country. This decision can be linked to the increasingly strict regulations for virtual asset service providers (VASP) in the Chinese region.
The Securities and Futures Commission (SFC) of Hong Kong warned that any VASP operating in the region and those yet to submit their license application must close down their operations in Hong Kong by May 31. This warning has caused some crypto exchange platforms to hurriedly submit applications, while some have also shut down businesses.
Gate.HK, which officially started operations in Hong Kong last May, stated that it will be undergoing a major overhaul of its platform and withdrawing license operations in the country.
The company, however, urged users of their platform to withdraw their assets before August 28, as it plans to delist all tokens, including major crypto coins like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Solana (SOL), amongst others, on May 28 by 4:00 PM (Hong Kong Time).
Aside from delisting, the exchange company stated that, effective from the moment the announcement was made, it no longer accepts deposits of assets or registers new users on its platform and has also stopped marketing its services in Hong Kong. The company stated:
“Cessation of Marketing: Effective immediately, Gate.HK will stop marketing its services in Hong Kong. We strongly advise users to allow themselves sufficient time to wind down or otherwise manage their positions with Gate.HK before 4:00 PM (Hong Kong time) on 28 May 2024 and to withdraw their assets from the platform before 28 August 2024.”
Gate.HK initially submitted its license application to the Hong Kong SFC in February. Although the sudden withdrawal is surprising, it can be traced to not being able to secure the proper licenses for legal operations within Hong Kong. Despite the setback, the crypto exchange platform revealed that it is working on making necessary changes to its operations and intends to restart its business in the region later in the future.
Responses of Other Crypto Exchanges to Regulatory Pressures
Gate.HK is not the first to withdraw its application, as several other virtual asset service providers have taken similar steps after being unable to scale through Hong Kong crypto regulations. HKVAEX, a Hong Kong crypto exchange platform allegedly linked to Binance, announced it was closing its business after withdrawing its license application on March 28.
Similarly, Huobi HK, HTX’s Hong Kong affiliate, retrieved its license application for the second time on May 14 and is set to shut down its operations by August. According to the SFC rule, virtual asset providers that fail to meet requirements are to shut down by May 31 or within three months of being notified by the regulator.
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