Hong Kong-based cryptocurrency exchange Gate.HK announced it will shut down on June 1 due to its inability to meet new local licensing requirements. The Hong Kong Securities and Futures Commission (HKSFC) requires all crypto exchanges in the region to obtain an operational license, and those failing to comply must close by May 31.

Gate.HK applied for a license on February 28 but withdrew its application on May 22, citing the need for significant changes to its trading platform to meet strict regulations. Consequently, Gate.HK stopped acquiring new users and halted marketing activities on May 23. Current users can no longer deposit funds but can withdraw funds until August 28. The exchange will fully cease operations and delist all tokens, including Bitcoin, Ethereum, Solana, Polygon, and Tether, by May 28.

Gate.HK's closure is part of a larger trend, with three other exchanges—Huobi HK, QuanXLab, and IBTCEX—also withdrawing their license applications in May, bringing the total to nine. Despite this, twenty cryptocurrency exchanges are still seeking licenses in Hong Kong.

Gate.HK intends to relaunch after overhauling its platform to meet Hong Kong’s regulatory requirements, including robust Anti-Money Laundering (AML) and counter-terrorism financing measures. The company aims to resume operations in the future to positively contribute to the crypto asset ecosystem once it secures the necessary licenses.

Meanwhile, the HKSFC is considering further regulatory developments, including allowing spot Ethereum ETF issuers to offer ETH staking options, which would provide passive income. The HKSFC is in discussions with crypto ETF issuers about providing staking services through licensed platforms, though no timeline for implementation has been set.

This evolving regulatory landscape in Hong Kong mirrors a global trend toward stricter regulation of the cryptocurrency sector. Governments and regulatory bodies are increasingly focused on protecting investors and ensuring market integrity, requiring exchanges to develop robust compliance frameworks.