Huobi Global (HGBL) Hong Kong Limited, a subsidiary of HTX, withdrew its application for a cryptocurrency trading license from Hong Kong’s Securities and Futures Commission (SFC) for the second time on May 14. This decision came just two months after Huobi HK had re-submitted its application on February 26, following an initial withdrawal three days prior. Hong Kong had released a regulatory deadline that required crypto exchanges to obtain a license or cease operations in the region by the end of May if they failed to apply by February 29. To date, only two platforms, HashKey and OSL, have secured licenses from Hong Kong regulators, while other major global crypto exchanges are still undergoing the licensing process.
HBGL, which operates Huobi HK, has withdrawn the licence application for unspecified reasons, requiring it to close the crypto exchange under the city’s virtual asset regulations. Despite Hong Kong’s apparent attractiveness, some crypto firms have abandoned the market. Huobi HK’s recent withdrawal marks the second time the company has pulled its application. The SFC has not offered an explanation for these repeated withdrawals, further fueling doubts about the exchange’s ability to operate successfully in Hong Kong. This lack of clarity has led to uncertainty in the industry regarding the future of the crypto market in Hong Kong.
The withdrawal of Huobi HK’s HTX Hong Kong License application presents a significant obstacle for Huobi Global (HTX), a major crypto exchange that ranks among the top five globally by 24-hour trading volume. In early 2023, HTX advisor and crypto influencer Justin Sun announced the company’s plan to launch a new Hong Kong-based exchange, Huobi Hong Kong, to meet the city’s updated crypto regulations. In February 2024, an HTX representative clarified that Huobi HK operates independently from its parent company. Despite the setback, other international crypto companies are still actively pursuing licenses in Hong Kong, indicating continued interest in the market.
The SFC’s website indicates that numerous major global crypto exchanges, including OKX, Bybit, Bullish, and Crypto.com, are still undergoing the licensing process in Hong Kong. The SFC is currently reviewing 20 such applications, showing the high level of interest in establishing a presence in the region despite the challenges faced by some companies. Huobi HK’s actions mirror a similar move by crypto platform HKVAEX, which ceased operations on May 1 after withdrawing its license bid in March. This trend of withdrawals and closures in the market has raised concerns about the feasibility of operating a crypto exchange in Hong Kong under the new regulatory regime.
Huobi HK’s late February resubmission was reportedly an attempt to avoid shutting down operations on June 1, as stipulated by the new virtual asset regulatory regime implemented in 2022. Although only a few international crypto companies met the application deadline, the Hong Kong market was seen as a desirable location for firms with Chinese roots that relocated abroad following Beijing’s industry crackdown. The withdrawal of Huobi HK’s license application highlights the challenges faced by crypto exchanges in navigating the regulatory landscape in Hong Kong, raising questions about the future of the industry in the region. Despite these setbacks, some companies continue to pursue licenses and establish their presence in the market, indicating ongoing interest in Hong Kong’s potential as a crypto hub.
