Here’s Why Binance and OKX Withdrew Their License Applications in Hong Kong
Hong Kong’s bid to become the most desirable destination for Web3 and crypto appears to have taken a back seat as some of the leading global exchanges have withdrawn their license applications from the Hong Kong Securities and Futures Commission (SFC).
Global Stock Exchanges Withdraw from Hong Kong
According to local news, some of the leading global exchanges such as binance, huobi and OKX decided to withdraw their applications in the last week of May, leaving only 11 applicants on the list.
Hong Kong SFC requires all applicants for virtual asset trading platform licenses to sign a letter of commitment to ensure there are no mainland Chinese users in any region. This requirement poses a significant challenge for traditional offshore exchanges. OKX attempted to form an industry alliance to challenge this requirement but was ultimately unsuccessful.
Some industry insiders have indicated that the withdrawn entity may revise its legal entity or framework and re-apply in the future. However, it should not use a brand similar to offshore exchanges in its application.
Are HK’s Web3 Goals Over?
With OKX’s exit from Hong Kong, many in the crypto community began to question whether Hong Kong’s Web3 ambitions were over.
Many people in Hong Kong’s WeChat circles accused authorities of being timid and overly cautious in implementing the new system. They argue that the authorities’ conservative and risk-averse approach, based on traditional financial thinking, undermines the competitiveness and flexibility of the licences. . As a result, some operators decided to withdraw their applications at the final stage, despite having invested significant resources and up-front costs.
The author noted several areas of concern regarding the new licensing system. First, various policies and measures related to the development of Hong Kong’s virtual asset market (such as VATP, stablecoin issuance, and over-the-counter virtual asset trading) were designed. different departments that do not have coherent strategic considerations for industrial development.
These policies entered the consultation or legislative process at different times and led to the gradual completion of the entire Web3 scheme. This long process has made it difficult to keep up with the rapid development of technology.
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Bhushan is a FinTech enthusiast and has a good ability to understand financial markets. His interest in economics and finance draws his attention to the emerging Blockchain Technology and Cryptocurrency markets. He is in a constant learning process and motivates himself by sharing the knowledge he has acquired. In her spare time, she reads thriller novels and sometimes explores her culinary skills.
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