Hong Kong authorities have opened a public consultation on legislative plans to establish a licensing system for providers of over-the-counter (OTC) virtual asset trading services.
The Hong Kong government claims that certain fraud cases have revealed the participation of VA over-the-counter operators; therefore, in order to lower the dangers associated with money laundering and financing, OTC services must be regulated under AMLO.
The consultation suggests that anyone operating a business in Hong Kong that offers spot trading services for any virtual asset for cash be required to obtain a license from the Commissioner of Customs and Excise (CCE).
Furthermore, the government intends to encompass all VA over-the-counter services, granting CCE supervisory power over licensees’ efforts to prevent money laundering and terrorist funding.
The two-month consultation period will end on April 12, 2024. Due to market events and requests from industry stakeholders, the Hong Kong Securities and Futures Commission announced in October of last year that it was amending its policy on virtual currency transactions and related regulations.
Virtual assets are governed by the same regulations as comparable financial goods and are regarded as complicated products under the department’s new criteria. The commission lists goods produced outside of Hong Kong and bitcoin exchange-traded funds (ETFs) as examples of sophisticated products.
