HBGL Hong Kong Limited, the Hong Kong affiliate of cryptocurrency exchange HTX (formerly Huobi Global), has withdrawn its application for a virtual asset trading platform (VATP) licence for the second time, leading to the required closure of its Huobi HK operations under city regulations.

The Securities and Futures Commission (SFC) removed HBGL from the list of cryptocurrency exchange licence applicants this Tuesday after withdrawing their application.

HBGL first applied for the licence on 20 February, withdrew it shortly after that on 23 February, and resubmitted on 26 February, just days before the city’s deadline for crypto exchanges to legally operate.

The specific reasons for the withdrawal have not been disclosed publicly, nor has it been stated whether the withdrawal was at the SFC’s direction. Regardless, the company is mandated to cease operations within three months, adhering to local regulations.

This development is part of a broader trend among crypto exchanges that are struggling with Hong Kong’s stringent regulatory environment.

HTX, the world’s sixth-largest crypto exchange by 24-hour trading volume and initially founded in Beijing in 2013, had previously announced plans to obtain a licence in Hong Kong through a statement by its adviser Justin Sun last year.

Despite these ambitions, HTX and its affiliate HBGL have faced significant hurdles navigating the new regulatory framework. HTX remains independently managed and is not involved in the management and operations of HBGL, which was specifically pursuing the licence for Huobi HK.

This scenario mirrors that of HKVAEX, a local firm backed by Binance, which also withdrew its licence application last month and announced its shutdown shortly after that.

Currently, there are 20 applicants remaining for Hong Kong’s VATP licence, including major platforms such as OKX, Crypto.com, Bybit, and Bullish, reflecting the ongoing interest and challenges within the region’s digital asset market.

Featured image credit: Edited from Freepik