Binance’s HKVAEX Withdraws Application to Obtain Regulatory License in Hong Kong
In a surprising turn of events, HKVAEX, a cryptocurrency exchange reportedly backed by Binance, has withdrawn its application to obtain a regulatory license in Hong Kong. This decision comes following the introduction of a comprehensive regulatory framework for digital asset service providers (DASPs) in the country.
The company, operating under the name BX Services Limited, initially applied for the license on January 4, 2024. However, on March 28, 2024, it was revealed that HKVAEX had withdrawn its application, as listed on the Hong Kong Securities and Futures Commission (SFC) website.
HKVAEX is not the only exchange to take this step, as earlier this year, HTX (formerly known as Huobi Global) also withdrew its application due to regulatory issues. The SFC had started accepting applications from crypto exchanges looking to enter the Hong Kong market legally, with 22 exchanges submitting applications.
While the reason behind HKVAEX’s withdrawal remains unclear, speculation suggests it could be related to insufficient materials. Chinese crypto reporter Wu Blockchain hinted at this possibility in a recent tweet.
With the application now withdrawn, HKVAEX has until May 31 to cease its operations in Hong Kong, in line with the SFC’s deadline for DASPs to either apply for a license or exit the market by that date.
Despite denials from both HKVAEX and Binance regarding any close ties between the two companies, sources familiar with the matter claim otherwise. Reports suggest that HKVAEX utilizes Binance resources, including technical support, and the two companies have been seen together at events in Hong Kong.
The withdrawal of HKVAEX’s application raises questions about the future of cryptocurrency exchanges in Hong Kong and the relationships between different players in the industry. As the regulatory landscape continues to evolve, it remains to be seen how exchanges will navigate these challenges and adapt to the changing environment.
