Despite recent withdrawals from the virtual asset market, there is still optimism about the future of Hong Kong's Web3 development. Hong Kong Legislative Council member Qiu Dageng recently questioned the impact of exchange withdrawals on Hong Kong's Web3 development, but many industry insiders believe that the Hong Kong Securities and Futures Commission's 'safety first' regulatory approach to virtual asset trading platforms is valuable.

Alessio Quaglini, co-founder and CEO of Hong Kong cryptocurrency custody provider Hex Trust, stated that the withdrawal of applications by virtual asset trading platforms is natural. This is due to the need to balance the scale of the Hong Kong retail market and high regulatory costs, as well as the impact on their global business. If the goal is to position Hong Kong as a global hub, then a strict regulatory framework strategy is reasonable, but execution should be improved.

Jonathan Crompton, a partner at Hong Kong RPC Law Firm, stated that the core principles of the Hong Kong Securities and Futures Commission's regulation of cryptocurrencies emphasize investor protection. It requires participants in the virtual asset market to meet the same standards as participants in traditional financial markets. The withdrawal of exchange license applications indicates that the Hong Kong Securities and Futures Commission will not let the market go at all costs.

The Hong Kong Securities and Futures Commission's regulatory approach is designed to ensure that the virtual asset market is safe and secure for investors. This includes requiring participants to meet high standards of governance, risk management, and compliance. The commission's approach is also designed to prevent market manipulation and protect investors from fraudulent activities.

Ultimately, the withdrawal of exchange license applications is a natural part of the development of the virtual asset market in Hong Kong. While it may be a setback for some, it is also an opportunity for the market to mature and for participants to adapt to the regulatory environment. With the right regulatory framework in place, Hong Kong can continue to position itself as a global hub for the virtual asset market.