Duncan Chiu called for a reassessment of the current regulatory policies to regain and bolster market confidence.
By Godfrey Benjamin
Edited by Julia Sakovich
Updated
3 mins read
Duncan Chiu, a member of the Hong Kong Legislative Council, recently voiced significant concerns about the city’s approach to regulating crypto exchanges, arguing that it is hindering the development of Web3.
In an opinion piece, Duncan Chiu highlighted the recent license withdrawals of several global crypto exchanges. He noted that these actions have shaken the confidence of market participants in Hong Kong’s aspirations to become a leading hub for Web3 innovations.
Chiu pointed out that the stringent regulatory framework imposed on crypto exchanges has become a major barrier to their entry and operation in Hong Kong. The current licensing requirements, he argued, are “excessively stringent”, creating an environment that is less welcoming to global players.
Also, Chiu mentioned that the departure of these exchanges sends a negative signal to the global crypto community about Hong Kong’s readiness to embrace and support the evolving landscape of digital assets and decentralized technologies.
In light of this, Chiu called for a reassessment of the current regulatory policies to regain and bolster market confidence. He suggested that regulators dialogue with industry stakeholders to understand their challenges and work collaboratively towards creating a more favorable ecosystem for crypto exchanges.
Recall that towards the end of last month, Gate.io, a crypto exchange platform announced that it would cease operations of its Hong Kong-based entity, Gate HK. Based on this, it has officially withdrawn its license application to operate a cryptocurrency trading platform in the country. As pointed out earlier, this decision is linked to the increasingly strict regulations for virtual asset service providers (VASP) in the Chinese region.
The Securities and Futures Commission (SFC) of Hong Kong warned that any VASP operating in the region and those yet to submit their license applications had to close their operations in the region by May 31 or within three months of being notified by the regulator. Gate.HK is not the first to withdraw its application, as several other virtual asset service providers have taken similar steps after being unable to scale through Hong Kong crypto regulations.
HKVAEX, a Hong Kong crypto exchange platform allegedly linked to Binance also announced it was closing its business after withdrawing its license application on March 28. Similarly, Huobi HK, HTX’s Hong Kong affiliate, retrieved its license application for the second time on May 14 and is set to shut down its operations by August. The first withdrawal was in February, a few days after the application was applied.
Likewise, OKX withdrew its application for a Hong Kong VASP license. In an official statement on its website, OKX also asked its customers to withdraw their funds. According to the SFC’s website, 11 entities have had their applications denied, returned, or removed. The page has no entities included on its list of platforms that are deemed to be licensed.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
