OKX, one of the world’s leading cryptocurrency exchanges, has decided to make a U-turn from its ambition to secure a Virtual Asset Service Provider (VASP) license in Hong Kong. The firm shared the development in a Friday announcement without letting out many details. It said that its decision to withdraw its application comes after a “careful consideration” of its business strategy.
OKX Exchange Halts Local Services as Regulatory Deadlines Loom
OKX has shared a clear timeline for how it intends to exit its centralized crypto exchange services for Hong Kong residents. That is in line with the ultimatum of May 31 that the Hong Kong Securities and Futures Commission (SFC) issued for platforms without the VASP license.
In compliance, OKX has warned users that deposits made after this date might not be automatically credited, while open orders would be cancelled. However, it also assured users that their funds are safe. The exchange confirms that it will keep the withdrawal feature open until August 31. However, it also warned users that failure to withdraw on or before August 31 may lead to the forfeiture of their remaining balances. According to OKX, such balances will be classified as “unclaimed property” under the platform’s terms.
Although OKX had submitted the VASP application since November 16, the withdrawal reflects a significant shift in the company’s future plans. The SFC’s website also confirmed the withdrawal but did not provide additional details regarding the company’s decision.
Future Prospects and User Reassurances
To address user concerns, OKX has reminded customers that its OKX Web3 self-custodial wallet will not be affected by these changes. This means that Hong Kong residents will continue to have access to the service, which allows users to retain full control over their assets, independent of the centralized exchange operations.
Without a doubt, Hong Kong’s regulatory space is undergoing substantial changes. More so, since it introduced a new licensing regime that took effect in June 2023. Since then, companies have struggled to obtain licenses and have had to cease their operations just like OKX.
Notable exchanges such as Gate.io’s affiliate Gate.HK, the Binance-associated HKVAEX, and Huobi HK have also withdrawn their VASP applications recently.
Despite this setback in Hong Kong, OKX continues to expand its global footprint. In January, the exchange secured a VASP license in Dubai. More recently, it began offering services in Turkey and Australia, suggesting its intent to pivot to other markets with more favourable regulatory conditions.
