Hong Kong crypto-service providers required to comply with AML rules

Hong Kong extends AML/CFT rules to virtual asset service providers and introduces a licensing regime for VASPs.

The Hong Kong Legislative Council approved amendments to the Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) laws, extending their application to virtual asset service providers (VASP) from June 1, 2023.

Crypto firms will begin implementing the recommendations followed by traditional financial institutions in the SAR.

The amendments will also establish a licensing regime for VASP.

The regulator will permit crypto exchanges and custodial platforms to operate only if AML rules and investor-protection requirements are observed.

On December 2, Eddie Yue, the Chief Executive of the Hong Kong Monetary Authority, announced preparations to tighten in light of FTX collapse.

In October, the Hong Kong Financial Services and Treasury Bureau pledged to provide regulatory mechanisms and investor protections for ETF based on digital assets.

Earlier reports said the SFC planned to allow retail investors to directly invest in cryptocurrencies.

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