HKVAEX Fallout: Exploring the Connection to Binance and Regulatory Concerns

On Apr 1, 2024

Recent revelations by Wu Blockchain have sent shockwaves through the cryptocurrency community, unveiling the abrupt closure of the Hong Kong exchange HKVAEX. Suspected to be affiliated with Binance, HKVAEX announced its permanent closure, prompting all users to withdraw their assets before April 30.

Timeline of Events

According to reports, HKVAEX submitted a license application to the Hong Kong Securities and Futures Commission (SFC) on January 4, 2024, only to withdraw it on March 28. This sudden withdrawal raised suspicions and fueled speculation regarding the exchange’s future.

Journalist Colin Wu suggests that possible reasons for the withdrawal could include requests for changes in the audit company or insufficient application materials.

The HKVAEX Hong Kong compliant cryptocurrency exchange license applied by Binance’s Hong Kong entity BX SERVICES LIMITED has been withdrawn. The reasons for the withdrawal are unclear and may include a request to change the audit company, insufficient materials, etc.…
— Wu Blockchain (@WuBlockchain) March 29, 2024

Here’s what you need to know!

This decision followed the SFC’s deadline of February 29 for all crypto exchanges to apply for licenses in the region. HKVAEX, reportedly linked to Binance as per Chinese media, initially applied on January 4.

In an official statement, HKVAEX confirmed the phased suspension and closure of its platform services. Key details of the announcement include:

Immediate Service Suspension: HKVAEX ceased new user registrations and virtual asset deposit services with immediate effect.

Trading Service Closure: Trading services will be terminated on April 5, 2024, at 23:59 UTC+8. All existing spot orders will be automatically canceled, and users will be unable to place new orders.

Website Delisting: The official HKVAEX website will be delisted on May 1, 2024, rendering it inaccessible to users.

Post-Delisting Support: Following the website delisting, users can seek assistance with asset withdrawals or other issues by contacting the support team via email.

For a smooth closure, HKVAEX urges all users to take immediate action by withdrawing their assets before April 30, 2024, emphasizing the importance of timely asset retrieval.

HKVAEX-Binance Connection

The closure of HKVAEX has sparked concerns and raised questions within the crypto community regarding the exchange’s ties to Binance and the reasons behind its sudden demise.

Last year, there were reports that Binance supported HKVAEX’s bid for a crypto license in Hong Kong, but now HKVAEX has withdrawn its application. It’s unclear why they withdrew, but it might be due to incomplete paperwork or other issues.

In response to the regulator’s scrutiny, a Binance representative clarified that HKVAEX isn’t affiliated with the Binance Group. There’s speculation that Binance sought a compliant separate exchange in Hong Kong to expand smoothly. However, indications suggest that the exchange may have already ceased operations.

This comes at a time when other big applicants are also withdrawing their applications. Hong Kong’s SFC is working on regulating the crypto industry. Currently, OSL and HashKey are the only two platforms approved for licenses by the SFC.