New legislation tailored to regulate the crypto space in Hong Kong aims to implement a licensing regime for crypto service providers. The respective changes to the region’s anti-money laundering (AML) rules have been submitted to its legislature while a recently published report examines relevant threats.
Hong Kong Lawmakers to Review Bill Aligning Crypto Sector With Financial Industry
Amendments designed to govern the cryptocurrency market in Hong Kong are given to the members of the legislative council of China’s special body region. The Anti-Money wash and Counter-Terrorist finance (Amendment) Bill 2022, that was revealed within the government gazette in June, needs their approval in two readings to become law.
The authors of draft seek to introduce licensing for virtual plus service providers (VASPs) and registration for dealers in precious metals and stones (DPMS). The goal is to impose anti-money wash and counter-terrorist financing obligations on the companies operating in the 2 sectors.
Entities working with cryptocurrencies that want to launch a trading platform, for example, would got to get a license from the port Securities and Futures Commission (SFC) and fulfill variety of needs. The proposal takes into account the recommendations of the money Action Task Force on hiding (FATF) that sets the global standards in the field.
The new needs for VASPs are comparable to those that apply to traditional institutions in the financial services sector and they will have to meet similar money adequacy needs, Apostle Leelarthaepin, crypto exchange Bitstamp’s decision maker for Asia Pacific, noted in article revealed by the South China Morning Post. In his opinion, that recognizes crypto companies as a component of Hong Kong’s financial system. the executive elaborated:
Put simply, VASPs can expect to be regulated to the same standard as our institutional clients. The law recognizes VASPs as peer organizations within the financial services sector.
Under the coming legislation, the SFC will be responsible to ensure that virtual quality service providers adopt correct listing and mercantilism policies yet as monetary reportage and revelation procedures. The Commission will observe the implementation of mechanisms designed to forestall market manipulation and conflicts of interest.
As legislators prepare to approve the new regulatory framework, the latest edition of Hong Kong’s money laundering and Terrorist financing Risk Assessment Report has paid particular attention to the threats and vulnerabilities within the crypto space. while acknowledging their potentials and increasing quality, the document also highlights the vulnerability of virtual assets to various risks and the challenges they pose for investor protection.
(Lubomir Tassev, Bitcoin.com, 2022 )