Gate.HK is preparing for a significant overhaul to ensure compliance with regulations and intends to resume services following the acquisition of required licenses.
Gate.HK, a cryptocurrency exchange based in Hong Kong, has ceased operations due to its inability to comply with the local licensing regulations that will come into effect on June 1.
The Hong Kong Securities and Futures Commission (SFC) issued a mandate requiring all cryptocurrency exchanges operating in the region to obtain a valid operational license. Exchanges that did not apply for a license were required to halt their services by May 31.
In response to this directive, Gate.HK submitted its license application to the SFC on February 28. However, the exchange decided to withdraw its application on May 22, stating the necessity for a “significant overhaul” of its trading platform.
As of May 23, Gate.HK has halted all efforts to attract new users and promotional activities. Existing users are now unable to make deposits and are limited to withdrawing funds until August 28th.
Gate.HK will shut down its trading platform permanently on May 28th, and all tokens will be delisted. This includes major cryptocurrencies such as Bitcoin (BTC), Ether (ETH), Solana (SOL), Polygon (MATIC), and Tether (USDT). The exchange plans to relaunch its services in the future after restructuring its platform to meet Hong Kong’s regulatory standards, which involve implementing Anti-Money Laundering and Counter-Terrorist Financing measures.
The announcement of OKX’s departure from Hong Kong on May 24 was followed closely by another major global exchange. According to the announcement, OKX will discontinue offering centralized virtual asset trading services to Hong Kong residents by May 31, 2024.
Before Gate.HK’s departure, three other exchanges — Huobi HK, QuanXLab, and IBTCEX — similarly withdrew their license applications in May.
According to a recent Bloomberg report, the SFC is contemplating the possibility of permitting spot Ether exchange-traded fund (ETF) issuers to incorporate an ETH staking feature, which would enable them to generate passive income.
The SFC has engaged in discussions regarding offering staking services through licensed platforms to the nation’s crypto ETF issuers following the submission of proposals in recent weeks. Currently, the financial regulator is in talks regarding this matter, with no specific timeline set for implementation.
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