Hong Kong might quickly bolster its policing of the cryptocurrency sector to raised conform with worldwide anti-money-laundering norms, Monetary Secretary Paul Chan stated in his annual price range speech Wednesday.
Promising that “detailed proposals” will come later this yr, Chan stated new laws may goal digital asset service suppliers, or VASPs, the catchall time period utilized by the Monetary Motion Activity Power (FATF) in its newest “Journey Rule” steering.
New laws may elevate the warmth on crypto exchanges, OTC desks and brokers in Hong Kong, a worldwide crypto hub. Such entities are already monitored by the Hong Kong Financial Authority (HKMA), which in December beneficial that VASPs keep vigilant in self-regulating their clients’ goings-on.
“[Authorized institutions] ought to maintain abreast of worldwide and native developments to keep up an up-to-date understanding of dangers, and apply a risk-based method that helps accountable monetary innovation in addition to efficient ML/TF threat administration,” HKMA’s AML enforcer, Carmen Chu, stated on the time.
The prospect of government-mandated laws comes months after the FATF, the worldwide AML standards-setting watchdog, rated Hong Kong “largely compliant” with its suggestions round rising applied sciences like cryptocurrency. However Hong Kong needs to additional construct out its anti-financial crimes framework, Chan’s speech reveals.
Nations are clamoring to get forward of FATF’s crypto pointers. Some newcomers, comparable to Paraguay, have taken their first steps in regulating VASPs, whereas others have arrange worldwide partnerships to observe cryptocurrency transactions.
On the identical time, crypto corporations themselves are angling to adjust to the Journey Rule, which mandates that cryptocurrency exchanges and others share transaction info above sure thresholds. They’ve till June 2020 to work it out.
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