Prominent cryptocurrency exchange OKX has announced its decision to withdraw its Virtual Asset Service Provider (VASP) license application in Hong Kong. In a blog post, the exchange explained that this move is part of a strategic reassessment of its business operations, though specific reasons were not provided. Consequently, OKX will cease its centralized crypto exchange services for Hong Kong residents by May 31 to comply with local regulatory requirements.
Key Details and Timeline
OKX reassured its users that their funds remain secure despite the impending changes. However, the exchange noted that any deposits made after May 31 may not be automatically credited, and all open orders will be canceled. Starting June 1, the only available function for Hong Kong residents on the platform will be withdrawals, which will be supported until August 31. After this date, any remaining balances will be classified as “unclaimed property” according to the platform’s terms.
The decision to withdraw the VASP application, which was initially submitted to the Hong Kong Securities and Futures Commission (SFC) on November 16, 2022, has been confirmed on the SFC’s website. OKX’s blog emphasized that virtual asset trading platforms in Hong Kong that have not submitted their license applications by February 29, 2024, must close down their businesses in the region by May 31, 2024. Investors using these platforms are advised to make necessary preparations ahead of the deadline.
Continuation of Web3 Services
Despite the cessation of its centralized exchange operations, OKX assured customers that its OKX Web3 self-custodial wallet services will remain unaffected and available to local users. This wallet operates separately from the centralized exchange services.
Broader Context and Strategic Shifts
This move follows the introduction of new licensing regulations by Hong Kong’s Legislative Council in December 2022. In response, several crypto exchanges, including Gate.HK and Huobi HK, have also withdrawn their VASP license applications. Meanwhile, OKX is actively expanding its operations in other regions, securing new licenses and services in Dubai, Turkey, and Australia.
The strategic withdrawal from Hong Kong highlights the dynamic nature of regulatory compliance in the crypto industry and OKX’s adaptive business strategy as it navigates varying regulatory landscapes globally.
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