The Hong Kong Legislative Council has approved a new amendment to its anti-money laundering and anti-terrorist financing system to include virtual asset service providers.
The latest legislation will establish a new licensing regime for virtual asset service providers, which will come into effect on June 1, 2023. The new amendment will subject cryptocurrency trading service providers to the same legislation followed by institutions traditional finance.
This means that virtual exchanges wishing to open a business in Hong Kong will have to go through rigorous anti-money laundering guidelines and investor protection laws before being granted a license to operate. Unlike most regulators around the world, Hong Kong has used the FTX collapse as a way to mitigate the regulatory risks associated with centralized exchanges.
In the aftermath of FTX’s collapse, regulators around the world have faced public outrage over their failure to protect retail investors. Demand has increased for cryptocurrency exchanges and service providers to comply with the law and strict anti-money laundering and investor protection requirements.
At a recent conference, the chief executive of the Hong Kong Monetary Authority, Eddie Yue, hinted at the possibility that investor protection rules might soon come to the country. The recent change in legislation has prompted the country to become the first to take the lead on the pressing issue of investor protection.
Hong Kong has been actively working to establish a well-thought-out regulatory foundation for the nascent cryptocurrency market. In October, the Hong Kong government released a policy proposing a risk-based regulatory framework and regulatory direction under the title “Policy Statement on Virtual Asset Development.” The government has suggested a series of pilot projects to test and improve the technologies underlying virtual assets.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.
