Regulation of Crypto Exchanges in Hong Kong
2022.12.08 04:40
Regulation of Crypto Exchanges in Hong Kong
Budrigannews.com – A new amendment to the anti-money laundering (AML) and terrorist financing systems in Hong Kong has been approved to include virtual asset service providers.
A new licensing system for virtual asset service providers will be established by the most recent legislation, which will take effect on June 1, 2023. Crypto exchange service providers will be subject to the same regulations as traditional financial institutions under the new amendment.
Before receiving a license to operate, virtual exchanges seeking to open a business in Hong Kong will have to comply with stringent AML regulations and investor protection laws. Hong Kong, in contrast to the majority of other global regulators, has utilized the FTX collapse to mitigate regulatory risks associated with centralized exchanges.
Regulators from all over the world have come under fire from the general public for failing to safeguard retail investors in the wake of the collapse of the FTX cryptocurrency exchange. There is a growing demand to place strict AML and investor protection requirements on crypto exchanges and service providers and bring them under the law.
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Eddie Yue, the chief executive of the Hong Kong Monetary Authority, gave a hint at upcoming investor protection regulations at a recent conference. The nation has become the first to act on the pressing issue of investor protection thanks to a recent legislative amendment.
Hong Kong has been working hard to develop well-thought-out regulatory foundations for the emerging cryptocurrency market. A strategy proposing an administrative structure and chance based administrative heading was distributed by the Hong Kong government in October under the title ‘Strategy Statement on the Improvement of Virtual Resources”. A number of pilot projects to evaluate and enhance the technologies that underpin virtual assets have been suggested by the government.
