All cryptocurrency exchanges that have not applied for an operational license with the Securities and Futures Commission (SFC) of Hong Kong are legally required to cease operations in the region immediately.

In an effort to minimize risks for investors, Hong Kong regulators issued a clear ultimatum to cryptocurrency exchanges: either apply for a license by Feb. 29 or shut down their operations within three months.

During this period, more than 22 cryptocurrency exchanges applied for licenses to maintain their presence in the region. However, many of these exchanges ultimately decided to withdraw their applications just before the deadline.

In May alone, six cryptocurrency exchanges, including global players like OKX and Huobi HK, withdrew from the Hong Kong market.

While most exchanges did not provide any reasons for the surprise turn of events, Hong Hong-based Gate.HK cited the need for a “major overhaul” of its trading platform before it could comply with Hong Kong’s regulatory requirements.

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Following the license withdrawal, Gate.HK ceased user acquisition and marketing. Existing users have been given until Aug. 28 to withdraw funds.

The Gate.HK trading platform will no longer be operational from May 28, all the previously tradable tokens, such as Bitcoin (BTC), Ether (ETH), Solana (SOL) and Polygon (MATIC), will be delisted permanently.

“Gate.HK is actively working on the aforementioned overhaul. We plan to resume our business in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses.”

As of May 31, 18 cryptocurrency exchanges have applied for an operational license in Hong Kong. According to the SFC, the list of approved exchanges will be announced by June 1. At the time of publication, the only approved cryptocurrency exchanges in Hong Kong are HashKey and OSL Exchange. 

It is important to note that cryptocurrency exchanges may not be granted a license and, as a result of the SFC's decision, may be required to shut down their operations in Hong Kong.

The SFC advises investors to check the official list of approved exchanges to minimize risks associated with trading cryptocurrencies.

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