Hong Kong has passed a new licensing regime for cryptocurrency exchanges that will subject providers to the same Anti-Money Laundering (AML) and counter-terrorist financing legislation as traditional financial institutions. The bill, passed on Wednesday, includes all virtual asset service providers and is set to come into effect from June 1.
This new bill requires crypto exchanges looking to set up shop in Hong Kong to show an ability to perform due diligence on their customers to meet the city’s AML and anti-terrorism financing standards before being granted a license. The move is aimed at protecting retail investors and cracking down on illicit financial activities.
The move comes as Hong Kong’s Securities and Futures Commission (SFC) also plans to allow a select group of cryptocurrencies to be traded by retail investors who had been banned from access to digital assets in 2021. Last year, Hong Kong loosened some restrictions on crypto retail investors, and at its annual FinTech Week 2022 in November, financial authorities signaled a desire for Hong Kong to emerge as a digital assets hub.
However, following the billion-dollar collapse of Sam Bankman-Fried’s FTX crypto exchange, there has been increased pressure for regulators worldwide to crack down on the industry and protect retail investors. Elizabeth Wong, a senior…
