Gate.io shelves plan to operate in Hong Kong

The subsidiary of crypto exchange Gate.io applied last year for a virtual asset service provider (VASP) license following the Group’s successful acquisition of the Trust and Corporate Service Provider (TCSP) license. At the time, Gate.io cited the nation’s crypto-friendly policies as Hong Kong’s government is pushing to attract digital asset businesses, which would increase retail investors’ access to top cryptocurrencies and crypto exchange-traded funds.

The company revealed in a statement that it will conduct a “major overhaul” of its current platform and has urged users to withdraw their assets by August 28.

Effective immediately, Gate.HK has stopped new user registrations and deposits, and plans to delist all tokens — including bitcoin, ether, bitcoin cash, litecoin, solana, polkadot, polygon, uniswap, and USDT — on May 28.

“Gate.HK is actively working on the aforementioned overhaul. We plan to resume our business in Hong Kong in the future and contribute to the virtual asset ecosystem after obtaining the relevant licenses,” the company stated.

The trading platform, which launched in May 2023, submitted its virtual asset trading platform application to the Hong Kong Securities and Futures Commission (SFC) in February. However, it withdrew the application on May 22, according to the SFC’s website.

According to the SFC, seven crypto exchanges have withdrawn their Hong Kong license applications in 2024. The reasons behind these withdrawals were not disclosed on the SFC’s website. All cryptocurrency exchanges that have not applied for a license must cease operations in Hong Kong by May 31.

Under the current framework, virtual assets are classified as “securities” or “commodities” depending on their specific characteristics and are subject to the same regulatory requirements as traditional securities and commodities. This means that cryptocurrency exchanges that operate in Hong Kong are required to comply with a range of regulations relating to customer due diligence, anti-money laundering (AML), and other consumer protection measures.

Gate.io’s US-based arm, Gate US, is licensed to offer virtual asset services in the United States. It holds regulatory approval to operate as a blockchain and digital asset infrastructure provider. The nod greenlights the exchange to launch its exchange platform and digital asset trading services to retail and institutional clients in several US states.

Gate.io also obtained authorisation to operate in Lithuania, which covers many business areas including crypto-asset trading, custodian service, digital asset wallet, and portfolio management.