Reports indicate that several major exchanges, including OKX, Huobi, and Binance, have decided to withdraw their applications for licenses from Hong Kong’s Securities and Futures Commission (SFC). This development is seen as a setback for Hong Kong’s ambitions to become a leading destination for Web3 and cryptocurrency.
According to local news sources, these exchanges withdrew their applications in the final week of May, resulting in only 11 remaining applicants on the list. The requirement for all virtual asset trading platforms to sign a letter of commitment from the SFC, guaranteeing the absence of mainland Chinese users, has posed a challenge for traditional offshore exchanges.
OKX attempted to form an industry coalition to challenge this requirement but was unsuccessful. It is possible for the withdrawn firms to modify their framework or legal status and reapply in the future. However, they must avoid using a brand that resembles an offshore exchange. The departure of OKX from Hong Kong has raised concerns about the city’s prospects as a Web3 hub.
Critics argue that the authorities have been overly cautious and hesitant in implementing the new regulatory system, thereby undermining the competitiveness and flexibility of the licenses. This cautious approach, based on conventional financial theory, has led some operators to withdraw their applications despite significant investments and commitments.
In other news, FTX has reportedly liquidated its remaining Anthropic shares amidst ongoing bankruptcy proceedings.