OKX, a prominent cryptocurrency exchange, has announced its decision to cease operations in Hong Kong, effective May 31, 2024. This move comes after the company withdrew its application for a Virtual Asset Service Provider (VASP) license in Hong Kong, citing "careful consideration" of its business strategy. The exchange will no longer provide centralized virtual asset trading services to Hong Kong residents, but users can still access their funds through the withdrawal function until August 31.

OKX emphasized that users' funds remain safe, but deposits made after May 31 may not be automatically credited, and open orders will be canceled. The withdrawal function will be the sole option available to Hong Kong residents until August 31, after which remaining balances will be deemed "unclaimed property" under the platform's terms. OKX submitted its VASP application to the Hong Kong Securities and Futures Commission (SFC) on November 16, 2023, but withdrew it recently, without disclosing the reason for the withdrawal.

The SFC has been reviewing applications from 20 crypto firms, including OKX, Bybit, Bullish, and (link unavailable), but OKX now joins other crypto exchanges that have recently withdrawn their applications with the local regulator. Hong Kong's Legislative Council passed an amendment introducing the licensing regime for cryptocurrency service providers in December 2022, with the new rules commencing in June 2023. Many global exchanges have applied for retail trading licenses, but OKX's withdrawal marks a significant shift in the crypto landscape, highlighting the regulatory and operational challenges faced by major industry players.

OKX's decision to cease operations in Hong Kong is part of a broader trend, as other exchanges, including sHong Kong have also withdrawn their applications with the local regulator The SFC has approved only two exchanges so far, and the regulatory environment remains challenging for crypto businesses in Hong Kong.

Despite the challenges, OKX has been actively acquiring licenses in various jurisdictions worldwide as part of its strategic expansion plan. January, OKX obtained a VASP license in Dubai and also recently opened crypto exchange services in Turkey and Australia . The company's OKX Web3 self-custodial wallet, separate from its centralized exchange services, remains unaffected and will continue to be available to local users.As the crypto landscape continues to evolve, OKX's decision to cease operations in Hong Kong marks a significant shift in the company's strategy, highlighting the importance of regulatory compliance and adaptability in the rapidly changing crypto environment.