OKX, a cryptocurrency exchange, made an announcement on Friday that it has decided to withdraw its Virtual Asset Service Provider (VASP) license application in Hong Kong. As a result, the exchange will no longer offer trading services to residents in the region.
OKX is not alone in this decision, as Gate.io’s Hong Kong affiliate, HKVAEX, and Huobi HK have also withdrawn their VASP applications from the Hong Kong Securities and Futures Commission. OKX stated that this decision was made after careful consideration of its business strategy, but did not provide any further details.
In compliance with local regulatory requirements, OKX will cease providing centralized crypto exchange services to Hong Kong residents by May 31. The exchange assured its users that their funds will be safe; however, any deposits made after this date may not be automatically credited and any open orders will be canceled.
Furthermore, any open orders by the end of May will be canceled and the funds will be transferred to the respective OKX account balances. Customers have until August 31, 2024, to withdraw their assets to self-custody wallets or accounts on other third-party platforms. After this deadline, users will no longer be able to initiate direct withdrawals or transfers, and any remaining balances will be treated as unclaimed property according to OKX’s terms of use.
Despite the cessation of its centralized exchange services, OKX reassured its customers that its OKX Web3 self-custodial wallet will still be available to local users and will not be affected by this decision.
The withdrawal of OKX’s application comes amidst Hong Kong’s cryptocurrency licensing requirements. The Legislative Council of Hong Kong passed an amendment in December 2022, introducing a licensing regime for cryptocurrency service providers, with the new rules taking effect in June 2023. As a result, the Hong Kong Securities and Futures Commission mandated that all regional crypto exchanges obtain an operational license. Exchanges that failed to apply for a license were required to cease their services by May 31, 2024.
OKX initially submitted its VASP application to the Hong Kong Securities and Futures Commission on November 16. Many other global exchanges, including prominent names like Bybit, Bullish, and Crypto.com, have also applied for these retail trading licenses. The SFC has been reviewing applications from 20 crypto firms.
Despite its withdrawal from Hong Kong, OKX has remained active in other jurisdictions. In January, the exchange obtained a VASP license in Dubai and has recently expanded its services to Turkey and Australia.