Hong Kong is no longer popular. Exchanges leave Hong Kong in batches after 2 days

OKX will withdraw from the Hong Kong market in two days.

I personally think it is normal for OKX to make this decision. If it does not get a Hong Kong license, it will at most clear out Hong Kong users. If it gets a Hong Kong license, I am afraid that even mainland users will be cleared out.

Mainstream transactions will leave Hong Kong in batches

In addition to the official announcement issued by OKX a few days ago, several exchanges have actually withdrawn their applications:

Among them, we are familiar with OKX and Gate/Huobi.

According to the regulations of the Hong Kong Securities and Futures Commission:

Virtual asset trading platforms operating in Hong Kong that have not submitted a license application to the Securities and Futures Commission on or before February 29, 2024 will have to end their business in Hong Kong on or before May 31, 2024.

This means that among the top ten exchanges in the world in terms of trading volume, except Bybit, they will have to say goodbye to Hong Kong:

You must know that all emerging projects in the encryption industry, especially project tokens screened by professional institutions, are issued on these exchanges.

You can't expect the entire encryption industry to build the twenty or so old coins approved by the Securities and Futures Commission, right?

If the current encryption policy in Hong Kong is strictly enforced, Hong Kong may be the most encryption-resistant place in the world except for mainland China.

It is difficult to say that the licensed exchange is successful

According to the information of the Hong Kong Securities Regulatory Commission, there are only two companies that have obtained VASP licenses: Hashkey and OSL

Hashkey can be regarded as the top of this batch of Hong Kong compliance institutions. In the exchange business, it is now a dual flagship model, Haskey Exchange is responsible for Hong Kong's local business, and Hashkey Global is responsible for global business.

Let's look at Hashkey Exchange first:

Yesterday's trading volume was only over 13 million US dollars, and there were only 20 currencies listed.

I feel really sorry for Hashkey. They have to work so hard to do so many things, and they have to comply with regulations. Many people are not qualified. In this situation, there are only 20 currencies available for trading.

Historical transactions have always been so bleak, and they can only be strong when the volume is increased:

Many people may have no idea about the transaction volume of 13 million US dollars. The transaction volume of Cobase, a compliant exchange in the United States, was 2.6 billion US dollars yesterday, which is 2,000 times that of Hashkey Exchanged.

As a global exchange, Hash Global's data is slightly better:

Although there are only three more currencies, the transaction volume has reached 160 million US dollars, which is more than ten times the transaction scale of Hashkey Exchange.

Another licensed institution, OSL, actually obtained a virtual asset trading license a long time ago:

OSL then consciously attached itself to the traditional head exchange Bitget. On November 14, 2023, OSL announced on its official website that it had received a strategic investment of approximately HK$710 million from BGX Group. BGX held 29.97% of the shares, becoming OSL's largest shareholder (the original BC Technology Group has been renamed). Bitget eventually entered the Hong Kong virtual asset market in compliance with its own regulations.  

So far, OSL's transaction data is still not available for checking. It is a characteristic of Hong Kong that such an exchange without even any transaction data has obtained a VASP license in Hong Kong.

Many traditional institutions are in the queue

There are 18 institutions still in the queue:

It may be that the business of the first two licensed institutions is not very good, and these dozen institutions have not yet obtained the license.

However, even if they get the license, it is estimated that it will be difficult. Among the applicants, except Bybit, which has some trading volume, the others are far away from the center of the encryption industry.

Without long-arm jurisdiction, Hong Kong will be embarrassed

In the world today, apart from the United States, there is no other country with long-arm jurisdiction.

As powerful as mainland China is, it is still easy for Chinese people to go overseas to download an exchange to register for trading in such a strict ban on encryption.

On the one hand, as a more internationalized place, Hong Kong people are more likely to go overseas, and it is difficult to require all exchanges to pay attention to the needs of the Hong Kong government. You are an offshore (former financial) center, and you have no jurisdiction outside Hong Kong.

On the other hand, for projects representing the forefront of encryption, the first choice for token issuance is still the large exchanges we are familiar with, such as Binance/OKX, etc.

What should crypto investors and project owners do if they stay in Hong Kong? Can they only list on compliant exchanges? Can they only trade on compliant exchanges?

All these will only make the crypto industry further away from Hong Kong.