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Hong Kong has recently emerged as a significant hub for the crypto industry, evidenced by the substantial interest from companies seeking to operate digital asset exchanges within its jurisdiction. Despite fierce competition from other global financial centers, Hong Kong has attracted 24 applicants for crypto exchange permits.&nbsp; 
Major crypto exchanges, including Binance, have chosen to forego applying for licenses. The deadline mandates that crypto exchanges either obtain licenses or cease operations by May 31, 2024. This move underscores the complex regulatory landscape in Hong Kong and the strategic decisions of these exchanges in navigating compliance requirements&nbsp; 
<h2 class="wp-block-heading" id="hong-kong-attracts-24-applicants-for-crypto-exchange-permits">Hong Kong attracts 24 applicants for crypto exchange permits</h2> 
Twenty-four businesses have applied for licenses to operate digital-asset exchanges in Hong Kong, including major heavyweights like Bybit, OKX, and Crypto.com, as the city seeks to establish a regulated hub for the industry. 
Gate.io, HTX, and Bullish were among the others with significant trading volumes to make the list. Hong Kong set a deadline of February 29 for applications and platforms that have not been submitted to stop operations by the end of May. 
The crypto sector will comb through the candidates to determine Hong Kong’s appeal as a digital asset center in the face of competition from other jurisdictions. The city’s nine-month-old virtual asset code prioritizes investor protection, meaning compliance expenses that could be prohibitive for some enterprises. 
Notably, Hong Kong has set a February 29 deadline for cryptocurrency exchange applications. According to the notice, non-compliant platforms must discontinue services by the end of May. 
According to Angela Ang, a senior policy adviser at TRM Labs, the applicant list serves as a litmus test for industry opinion, stressing the necessity of committed actors in anchoring Hong Kong’s crypto ecosystem, <a href="https://www.bloomberg.com/news/articles/2024-03-01/hong-kong-attracts-22-applicants-for-crypto-exchange-licenses" rel="nofollow noopener" target="_blank">Bloomberg</a> said. On the other side, Ding Chen, Bullish’s head of regulatory affairs, admits the costs of running a regulated organization but emphasizes the importance of factoring them into overall strategy. 
<blockquote class="wp-block-quote"> 
 The application list is the litmus test for industry sentiment […] it’s a good sign to see a number of well-known players in the mix. What Hong Kong really needs is a number of committed, sizable players to anchor its ecosystem. <cite>Angela Ang</cite>
</blockquote> 
According to Chainalysis data, the majority of the estimated $64 billion in cryptocurrency that flowed into Hong Kong in the year through June happened through over-the-counter (OTC) trading rather than digital-asset exchanges. 
Hong Kong is also developing laws for stablecoins and is considering enabling exchange-traded funds to invest directly in some cryptocurrencies. Last month, the government auctioned $750 million in digital green bonds through HSBC Holdings Plc’s tokenization technology. 
<h2 class="wp-block-heading" id="binance-misses-out-on-the-deadline">Binance misses out on the deadline</h2> 
The list does not include Binance, the world’s largest exchange. Coinbase, the main platform in the United States, and Kraken, another popular trading site, were also barred. 
Hong Kong shifted its focus to developing a crypto hub in late 2022 as part of an effort to look forward in the face of uncertainty about the city’s future. There are presently two permitted digital asset exchanges: HashKey Exchange and OSL Group. 
According to Gary Tiu, the company’s head of regulatory relations, the developing regulatory landscape will most likely have an impact on how OSL builds its business, and expenses will have to be considered. 
Notably, amidst the flurry of licensing applications, Matrixport, a major player in the cryptocurrency space, has proved its dedication to regulatory compliance. On February 26, the company requested a virtual asset trading license from the Hong Kong Securities and Futures Commission (SFC). 
This preemptive measure demonstrates Matrixport’s commitment to maintaining regulatory standards, which are critical for establishing trust and stability in the fast-evolving digital asset market. 
Meanwhile, as Hong Kong seeks to strengthen its position as Asia’s crypto capital, regulators step up efforts to combat suspect over-the-counter (OTC) trade. Over 450 businesses, including shops, ATMs, and online platforms, enable OTC crypto trading, accounting for a major portion of the city’s $64 billion in digital asset transactions. 
<h2 class="wp-block-heading" id="severe-crackdown-lays-in-wait">Severe crackdown lays in wait</h2> 
Furthermore, four other exchanges—Ammbr, BitHarbour, Huobi HK, and Meex—had previously submitted licensing applications but either withdrew or had them returned. To alert the public about the risks involved, the SFC will publicly track the cryptocurrency site that will eventually be obliged to close down by law. 
Throughout the shutdown, Hong Kong will limit the exchange’s capacity to operate and disable any regional marketing. Beginning June 1, 2024, the Hong Kong SFC will also publish a directory of cryptocurrency exchanges that are regarded to have secured a license. Nonetheless, not all of the names listed will be guaranteed license procurement.

Which crypto exchange made it to Hong Kong’s license application deadline?

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