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.
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