Hong Kong’s crypto exchange bows to regulatory pressure.

Update May 24, 12:50 pm UTC: This article has been updated to include news regarding the withdrawal of the OKX exchange from Hong Kong.

Hong Kong-based cryptocurrency exchange Get.HK has been shut down after failing to meet local licensing requirements that came into force on June 1.

Hong Kong's Securities and Futures Commission (SFC) has ordered all crypto exchanges in the region to obtain operating licenses. Exchanges that fail to apply for a license have until May 31 to cease their services.

Following this requirement, Gate.HK submitted its license application to the SFC on February 28. However, the exchange withdrew the application on May 22, citing the need for a “major overhaul” of the trading platform.

As of May 23, Gate.HK has stopped all activities related to acquiring new users and marketing. Existing users can no longer make deposits and are limited to withdrawals until August 28.

Gate.HK will pull the final plug on May 28 where all tokens will be permanently deleted. The list of tokens includes Bitcoin (BTC), Ether (ETH), Solana (SOL), Polygon (MATIC) and Tether (USDT) among others.

The crypto exchange plans to launch the service after rebuilding its platform to comply with Hong Kong's regulatory requirements. These requirements include establishing anti-money laundering and anti-terrorist financing measures. The company said:

“Gate.HK is actively working on the above update. In the future, we plan to continue our operations in Hong Kong and contribute to the virtual property ecosystem after obtaining the appropriate licenses.

The news comes a day before another major international exchange, OKX, announced that it would be pulling out of Hong Kong on May 24. The OKX exchange will stop providing centralized virtual property trading services to Hong Kong residents on May 31, 2024, the announcement said. Adding:

“Customer funds will remain safe, and withdrawal services will not be affected. Customers will only be able to withdraw after May 31, 2024.”

Before Gate.HK's withdrawal, three other exchanges – Huobi HK, QuanXLab and IBTCEX – also released their license applications in May.

Related: Hong Kong Bitcoin, Ether ETFs Wipe Out 2 Weeks of Earnings in One Day

According to a recent Bloomberg report, the SFC is considering allowing spot ether exchange fund (ETF) issuers to include an ETH staking option to generate passive income.

The SFC is reportedly in talks with the country's crypto ETF issuers to offer staking services on licensed platforms after making proposals in recent weeks.

The financial regulator is currently discussing the issue, and there is no specific time limit for implementation.

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