OKX Bows Out of Hong Kong, Withdraws VASP License Bid

While OKX is discontinuing its centralized cryptocurrency trading services for Hong Kong residents, the exchange’s Web3 self-hosted wallet offerings will not be impacted.

In compliance with regulatory requirements, OKX said that it would discontinue its centralized cryptocurrency trading services for residents of Hong Kong starting May 31, 2024.

OKX attributed the decision to withdraw its virtual asset service provider (VASP) license application to a “careful consideration” of its business strategy, however, the exchange did not provide further details or specific reasons behind this move.

OKX Retreats from Hong Kong

In its official blog post on Friday, OKX revealed that the customer funds remain secure, and withdrawal services will continue to function normally.

After May 31, 2024, Hong Kong-based customers will only be able to withdraw their funds from the platform and will not be able to trade or deposit. It’s important to note that OKX’s Web3 self-hosted wallet services will remain accessible to Hong Kong users and will not be affected by this change.

The cryptocurrency exchange advised users to refrain from making any deposits into their OKX account after the deadline. Furthermore, any open orders that are not closed by this date will be canceled, and resulting funds will be transferred to their OKX account balance.

“After careful consideration of our business strategy, we’ve decided to withdraw OKX HK’s VASP license application at this time. OKX will cease to provide centralized virtual asset trading services to Hong Kong residents by 31 May 2024 (Friday) in accordance with regulatory requirements.”

OKX submitted its application for a virtual asset service provider (VASP) license to the Hong Kong Securities and Futures Commission on November 16th. However, as confirmed on the SFC’s website, the firm withdrew its application on May 24th without disclosing any reason behind the move.

OKX isn’t the only one to call it quits. In fact, several other applicants, including the Hong Kong subsidiary of HTX and Huobi Hong Kong, also withdrew their applications for VASP licenses with the Securities and Futures Commission (SFC) earlier this month.

So far, the regulator has only approved two cryptocurrency exchanges to operate legally. The website mentions that OSL Exchange’s OSL Digital Securities Limited and HashKey Exchange’s Hash Blockchain Limited are the only two entities that have secured the license.

Indian Exit

The development comes two months after OKX informed its users in India that it is stopping its services in the country due to local regulations. The cryptocurrency exchange sent an email on March 21st advising Indian users to close out their positions by the end of April.

This move by OKX was prompted by the Indian government’s increasing scrutiny and crackdown on global crypto exchanges operating, which resulted in several entities ceasing operations in the country.