Hong Kong's Securities and Futures Commission (SFC) set a transition period for virtual asset licensing, requiring platforms that had not applied for a license to cease operations by May 31, 2024. This move led to many platforms choosing to withdraw from the Web 3.0 market, indicating a cooling interest in the space.

Chen Bocheng, Dean of the Asian Digital Economy Institute in Singapore, highlighted that Hong Kong's support for the development of the digital economy did not mean complete tolerance for parts of cryptocurrency that conflicted with current regulatory policies. Nor would it indiscriminately accept Web 3.0 projects that used Hong Kong as a haven to evade regulations in other countries and regions. Safety was a must, and development was necessary.

This stance was echoed by the Financial Secretary of Hong Kong at the Web 3.0 Technology Week at the end of last year, emphasizing the importance of a healthy market and embracing the future. The Hong Kong government's attitude towards virtual currencies was one of caution, as evidenced by the recent cases of virtual currency investment fraud.

The SFC's transition period for virtual asset licensing was a significant development in Hong Kong's regulatory landscape. It underscored the government's commitment to ensuring the safety and stability of the financial system, while also supporting the development of the digital economy.

The withdrawal of many platforms from the Web 3.0 market was a testament to the challenges faced by the industry. The lack of clear regulatory guidelines and the risk of fraud led many platforms to reconsider their operations in Hong Kong.

In conclusion, the SFC's transition period for virtual asset licensing was a significant development in Hong Kong's regulatory landscape. It highlighted the government's commitment to ensuring the safety and stability of the financial system, while also supporting the development of the digital economy. The withdrawal of many platforms from the Web 3.0 market was a testament to the challenges faced by the industry, and the need for clear regulatory guidelines and a healthy market environment.