By
Chimamanda U. Martha
April 26th, 2024
Hong Kong’s crypto licensing regime began in June 2023 to set the tone for the way exchanges would offer retail trading services.
HTX, a leading technology company, is said to have withdrawn its application for an operational license in Hong Kong. The surprising move was first reported by the South China Morning Post, coming barely three days after the platform initially submitted its application on February 20.
HTX’s Hong Kong entity had applied to operate as a “virtual asset trading platform” in the region. That license, had it met all requirements, would have allowed it to offer retail trading services. However, according to the list of license applicants currently on the website of the Securities and Futures Commission (SFC), HTX may have made a strategic reassessment of its plans.
Even more surprising is how the exchange has been keen on expanding its presence in the vibrant Asian market. Recall that last June, Justin Sun even made a call that HTX (then Huobi) would get the nod to offer crypto trading services in Hong Kong within 6 to 12 months. That is because Hong Kong presented the perfect opportunity for strategic expansion in view.
Speculations Surround HTX’s Hong Kong License Withdrawal
As of publication, there is no official word about the decision to go back on the application. So it is not yet known whether it is a temporary or permanent decision. Nonetheless, there may be reasons to believe that it is linked to the escalating regulatory scrutiny in the region. That is as authorities have been tightening their grip on the crypto sector.
Hong Kong’s crypto licensing regime began in June 2023 to set the tone for the way exchanges would offer retail trading services. So far, two platforms, HashKey and OSL, have bagged the licenses, with many more global exchanges still in line for the same.
From the information available on the local regulator’s website, it currently has applications from 19 crypto firms under review. That includes popular exchanges such as OKX, Bybit, and Crypto.com.
According to an earlier announcement by the SFC, crypto trading platforms have until February 29 to submit their license applications or otherwise have their Hong Kong businesses shut down by May 31.
Meanwhile, it might be worth noting that Hong Kong’s approach is considerably friendlier to crypto firms. That is especially true considering what many think is a hostile approach on the part of China, where there is a broader crackdown on crypto trading and mining.
Whatever might be the case, the decision reflects the company’s commitment to compliance and its reluctance to engage in unnecessary delays.
Overall, HTX is expected to remain focused on its global expansion strategy. With operations spanning multiple continents, HTX should not have a problem with continuing its growth trajectory despite the challenges posed by regulatory uncertainties.