OKX has withdrawn its application for a license to provide virtual asset services in Hong Kong and plans to stop providing centralized virtual asset trading services to users in the region. The statement stated that the company has withdrawn its application for a VASP license and will stop providing centralized virtual asset trading services to Hong Kong residents from May 31, 2024.

Explore regulatory compliance

Despite this, OKX HK still assures users that funds are safe and withdrawal services will not be affected. The company said the decision to withdraw the license application was made after a comprehensive review of its business strategy. By terminating centralized virtual asset trading services, OKX HK aims to effectively meet regulatory compliance requirements while prioritizing the interests of customers.

During the transition period, customers can withdraw assets from OKX accounts until August 31, 2024. During this period, funds can be transferred to self-service wallets or third-party platforms.

After the deadline, OKX HK will treat any remaining balance in the customer's account as unclaimed property in accordance with its Terms of Use. The exchange advises users to stay informed of further developments and adhere to the guidance provided to effectively manage their assets following the closure.

OKX’s action follows a similar decision by HTX affiliate Huobi Hong Kong (formerly Huobi Global), which recently withdrew its application for a virtual asset trading platform (VATP) license to operate in Hong Kong. This reportedly marks the second time the company has paused seeking regulatory approval.

Hong Kong regulatory pressure

Huobi Hong Kong did not specify the reason for withdrawing its license application, triggering speculation that it may encounter regulatory pressure. Following the latest withdrawal, Hong Kong’s Securities and Futures Commission (SFC) has removed HBGL Hong Kong Limited from the list of applicants for a cryptocurrency trading license.

The withdrawal comes amid the introduction of Hong Kong’s new virtual assets regime, which imposes strict requirements on cryptocurrency exchanges seeking licenses. Failure to meet these standards will result in forced closure by the SFC within three months of notification.

Huobi Hong Kong’s withdrawal of its license application is not an isolated incident in Hong Kong’s cryptocurrency market. Binance-backed HKVAEX also recently withdrew its license application, highlighting the complexity and cost of regulatory compliance in the region. With only a handful of applicants for Hong Kong VATP licenses remaining, the industry faces continued uncertainty and regulatory scrutiny.