In a surprising turn of events, HKVAEX, the cryptocurrency exchange affiliated with Binance, has announced its closure in Hong Kong, just three months after initiating its licensing bid in the city. The decision was revealed by Walton Chan, the head of operations, in the company’s official Telegram group chat. Users have been advised to withdraw their assets by April 30, with the website set to shut down on May 1 and trading services ceasing on April 5. Deposits and new registrations have already been halted.
The closure follows the departure of former CEO Stanley Fung, who left the company less than two months ago. Fung expressed ignorance about the reasons behind the recent decision, adding an air of mystery to the situation. Despite attempts to reach HKVAEX for comment, the company has remained silent on the matter.
HKVAEX’s journey comes to an end barely a year after its launch in February 2023, which aimed to establish itself as a pre-existing service provider ahead of new regulations from the Securities and Futures Commission (SFC) that took effect in June. While the exchange submitted its license application in January, well before the February 29 deadline, the SFC’s website indicates that the application was withdrawn on March 28.
Questions have been raised about HKVAEX’s ability to secure a license, particularly in light of its ties to Binance and the latter’s legal issues regarding US anti-money laundering laws. Despite Binance’s assertion that HKVAEX is not part of its group of companies, suspicions lingered. Now, with HKVAEX closing its doors, Binance stands alone as the major Chinese-founded crypto player without a subsidiary pursuing a Virtual Asset Trading Platform (VATP) license in Hong Kong.
HKVAEX’s decision to shut down before the conclusion of the SFC’s application process has puzzled many. While the company has not provided an official reason, concerns about high compliance costs and stringent requirements, such as cold storage reserves, likely played a role. These challenges have been a point of contention among VATP operators in Hong Kong, who find the requirements more demanding than those in neighboring markets like Singapore.
Despite the setback, Stanley Fung remains optimistic about Hong Kong’s future in the Web3 industry. He sees the city as a potential hub for these technologies and is excited about the opportunities that lie ahead. As HKVAEX fades into the background, the crypto community watches to see what the future holds for the industry in Hong Kong.
(Source: Coinpedia | CryptoSlate | SCMP)
