Hong Kong Virtual Assets Travel Rule Working Group

The Hong Kong Securities and Futures Commission’s (SFC) Consultation Paper on the Proposed Regulatory Requirements for Virtual Asset Trading Platform Operators is open for responses from 20 February until 31 March. VerifyVASP has brought its Hong Kong members and other industry participants together as a working group to review and discuss the Travel Rule related regulatory requirements.

Attended by Amber Group, BitMEX, Bullish, Cobo, HKVAX, Houbi, Matrixport, OKX and PFH, the working group’s objectives, similar to those run in other jurisdictions were to gather the licensed VASPs together to form a consistent interpretation of local regulations. Based on this interpretation, industry best practices can be formed. These practices are critical for a regulatory change as transformative as the Travel Rule which requires the exchange of information within the remit of data protection laws.

This discussion would also help craft a response to the Consultation Paper that is based not only on practical considerations of Hong Kong-based entities but also with VerifyVASP’s vast experience of supporting its members in pioneering jurisdictions enforcing Travel Rule (i.e. Travel Rule obliged) or other members needing to connect to them (i.e. non-Travel Rule obliged).

We believe that through this close collaboration with the local industry, regulators and solution providers, Travel Rule can be seamlessly enforced not just for the local jurisdictions but across countries as its adoption is being accelerated globally.

This will also help to align the industry and regulators, through such consults to align better to FATF standards, especially with the FATF developing a roadmap to strengthen the implementation of its standards and a stock-take of current implementation levels across various jurisdictions.