In response to stringent regulatory requirements set forth by the Hong Kong Securities and Futures Commission (SFC), Gate.HK, a prominent cryptocurrency exchange based in Hong Kong, has ceased operations. The closure comes as Gate.HK failed to secure the necessary operational license mandated by the SFC, which is set to be enforced starting June 1.

The SFC's directive stipulates that all cryptocurrency exchanges operating in Hong Kong must obtain a valid license to continue their operations. Exchanges that have not applied for a license are required to halt their services by May 31 to ensure compliance with the regulatory framework.

Gate.HK had initially submitted its license application to the SFC on February 28. However, citing the need for significant platform enhancements to meet regulatory standards, the exchange made the decision to withdraw its application on May 22.

Effective May 23, Gate.HK has ceased onboarding new users and marketing activities. Additionally, existing users are no longer able to make deposits and are limited to withdrawing their funds until August 28. The exchange will officially shutter its trading platform on May 28, with all listed tokens, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Polygon (MATIC), and Tether (USDT), being permanently delisted.

Gate.HK has expressed its commitment to relaunch its services in the future, pending the successful reconstruction of its platform to align with Hong Kong's regulatory requirements. This includes the establishment of robust Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures.

In light of Gate.HK's exit, three other exchanges—Huobi HK, QuanXLab, and IBTCEX—have also withdrawn their license applications in May. In total, nine crypto exchanges have opted to withdraw their applications in response to the regulatory landscape in Hong Kong.

Meanwhile, the SFC is reportedly exploring the possibility of allowing spot Ethereum exchange-traded fund (ETF) issuers to incorporate ETH staking options. This move would enable ETF issuers to generate passive income through staking services provided via licensed platforms. While discussions are ongoing, there is currently no definitive timeline for the implementation of such measures.