Hong Kong to bolster crypto regulations in line with international AML norms

The new regulations could target virtual asset service providers (VASPs), a term used by the Financial Action Task Force (FATF) in its latest ‘Travel Rule’ guidance. The new regulations focus on crypto exchanges, over-the-counter desks and brokers in Hong Kong. Such entities are already monitored by the Hong Kong Monetary Authority (HKMA), which in December 2019 recommended that VASPs stay vigilant in self-regulating their customers’ goings on.

The prospect of government-mandated regulations comes months after the FATF, the global AML standards-setting watchdog, rated Hong Kong ‘largely compliant’ with its recommendations around emerging technologies like cryptocurrency. But Hong Kong wants to further build out its anti-financial crime framework.

Crypto firms are angling to comply with the Travel Rule, which mandates that cryptocurrency exchanges and others share transaction information above certain thresholds. They have until June 2020 to work it out.