A Review of Mainland China's Ban on Virtual Currency Trading Platforms
The history of mainland China's regulation of virtual currency trading platforms is a process from restriction to outright prohibition. As early as 2013, the People's Bank of China (PBOC) had already banned banks from engaging in cryptocurrency-related businesses, laying the groundwork for subsequent policy tightening.
- September 2017: ICO Ban and Exchange Shutdowns In September 2017, the People's Bank of China (PBOC) and six other ministries jointly issued an announcement, completely halting Initial Coin Offering (ICO) activities and explicitly stating that virtual currencies do not have legal tender status. Subsequently, domestic virtual currency exchanges were required to close, for example, Bitcoin China (BTC China) ceased all trading operations in September 2017. Many domestic exchanges consequently shifted their business focus overseas.
- September 2021: Comprehensive Ban on Virtual Currency-Related Businesses On September 24, 2021, the People's Bank of China (PBOC) and nine other departments jointly issued the "Notice on Further Preventing and Disposing of Risks Related to Virtual Currency Trading and Speculation," classifying all virtual currency-related business activities as illegal financial activities. The notice explicitly stated that overseas virtual currency exchanges providing services to mainland Chinese residents via the internet also constitute illegal financial activities. Affected by this, major trading platforms such as HTX, Binance, and OKEx announced the delisting of mainland Chinese users and the cessation of related services before the end of 2021.
Hong Kong's Regulation and Development of Virtual Asset Trading Platforms
Unlike mainland China's comprehensive ban, Hong Kong has adopted a strategy of gradually establishing and improving its virtual asset regulatory framework, aiming to become an international virtual asset financial hub.
- Gradual Establishment of the Regulatory Framework (2017-2022) The Hong Kong SFC has successively issued regulatory statements on ICOs, virtual asset portfolio management, and trading platforms since 2017. In November 2019, the SFC first implemented a licensing regime for cryptocurrency exchanges, initially limited to professional investors. In December 2022, the Hong Kong Legislative Council passed the "Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022," laying the foundation for a mandatory licensing regime for Virtual Asset Service Providers (VASPs).
- VASP Licensing Regime Takes Effect (June 1, 2023) The Hong Kong SFC officially implemented a new virtual asset regulatory framework and the "Guidelines for Virtual Asset Trading Platform Operators" on June 1, 2023. The new regulations allow licensed virtual asset trading platforms to provide services to retail investors, provided that adequate investor protection measures are in place. Platforms that were already operating in Hong Kong before June 1, 2023, have a 12-month transition period (until May 31, 2024) to submit their license applications, during which they can continue to operate. As of December 18, 2024, the Hong Kong SFC has granted licenses to 4 virtual asset trading platform applicants through an expedited licensing process. The Hong Kong government plans to introduce a more comprehensive virtual asset licensing regime in 2026, extending the scope of regulation to trading, custody, advisory, and asset management activities.
- Over-the-Counter (OTC) Trading Regulation Hong Kong Customs is responsible for regulating over-the-counter trading of virtual assets. On February 8, 2024, the Hong Kong government published legislative proposals planning to require companies providing virtual asset OTC trading services to obtain a license issued by Customs.
Gate.io (Zhima Kaimen) Platform Background and Compliance Progress
Gate.io, formerly known as "Biter," was established in 2013 and is one of the world's leading cryptocurrency trading platforms. The platform was rebranded as Gate.io in 2020 and underwent a brand upgrade in 2025, with its Chinese name updated to "Damen."
- Global Presence and Market Position Gate.io has over 18 million registered users in more than 130 countries worldwide, offering over 1,400 virtual currencies and 2,400 trading pairs, and is particularly known for its wide selection of cryptocurrencies. As of December 2025, Gate.io's 24-hour spot trading volume consistently ranks among the top ten globally, placing 8th worldwide.
- Compliance Strategy and License Acquisition Gate.io actively seeks compliant operations globally. The platform has obtained a Hong Kong TCSP (Trust or Company Service Provider) license, which is significant for its expansion in the Asian market. Additionally, Gate.io has obtained a VASP license in Dubai and a virtual asset service provider license from the Central Bank of Lithuania, enabling it to operate compliantly in the EU region.
- Security Measures and Proof of Reserves Gate.io employs multi-standard security measures, including two-factor authentication (2FA), cold wallet storage, SSL anti-theft encryption technology, KYC verification, and a security and rule of law fund. The platform claims to have 100% margin verification, with total reserves exceeding $10 billion and a reserve ratio of 128.58% as of December 2025.
