Cryptocurrency exchange Gate, whose Hong Kong unit pulled out of the city’s Virtual Asset Trading Platform (VATP) license application last year, may consider reapplying, but high compliance costs still pose a challenge for the company, according to founder and CEO Lin Han.
“We understand the intention behind it [Hong Kong’s] policies, but they impose some constraints,” Han said in an interview Thursday. “After one year of operation. [in Hong Kong]We found it difficult to cover the cost locally.”
Gate was “monitoring” the performance of other Hong Kong-licensed platforms and their ability to scale business, as it assessed whether to reactivate its crypto exchange licensing efforts in the city, Han said.
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But the company will “actively explore” applications for the city’s upcoming licenses for virtual asset (VA) dealing services, previously named over-the-counter virtual asset trading services, once the regulatory framework begins, he said. Gate was also looking to work with payment companies by providing blockchain infrastructure services, he added.
Gate is evaluating whether to reactivate its crypto exchange licensing efforts in Hong Kong. Photo: AFP alt=Gate is evaluating whether to reactivate its crypto exchange licensing efforts in Hong Kong. Photo: AFP>
Gate, which launched in mainland China in 2013, was the world’s third-largest cryptocurrency exchange by 24-hour trading volume, behind Binance and Bybit, according to data tracker CoinGecko.
The company was among the major crypto exchanges to plunge into the Hong Kong market between 2023 and 2024 after the city’s regulators introduced a mandatory licensing system for trading platforms. Many left Hong Kong last year after a one-year grace period, which allowed them to work while they applied for licences.
Han’s remarks provided insight into the intensive efforts required for global platforms to gain legitimacy under Hong Kong’s regulatory framework for digital assets.
He added that while the Hong Kong market was highly competitive and licensing costs high, it was limited in both size and the range of digital asset products that could be offered.
“The reality is that users have many options outside of Hong Kong,” Han said. “So it’s very challenging for us to provide a local service that can convince users to choose us over foreign platforms. This is one of the biggest difficulties we face.”
