Hong Kong Opens Up Virtual Asset Licensing Regime, Increasing Demand for AML Compliance Solutions

Hong Kong's virtual asset licensing regime officially opened on June 1, allowing platforms interested in virtual asset business to apply for a license from the Securities and Futures Commission and be regulated by it.

With this move, Hong Kong has taken an important step towards becoming a new global virtual asset center. However, the virtual asset trading platforms will face stricter regulatory and compliance requirements, with anti-money laundering capabilities being a key focus of qualification review.


All Comments

Recommended for you

  • The EU will collect data proving that cryptocurrency PoW mechanisms "seriously" harm the environment and plans to develop sustainability standards

    On September 28th, the European Commission released a tender contract worth 800,000 euros (approximately $842,000) aimed at mitigating the "significant harm" that cryptocurrency poses to the environment. The research, which will end on November 10th, will establish standards that will be incorporated into potential future EU policies to curb the impact of cryptocurrency on climate change and develop new energy efficiency labels for blockchain. The European Commission stated in the tender document that "there is evidence that crypto-assets can cause significant damage to the climate and the environment," which could undermine the EU's greenhouse gas reduction targets, indicating that new sustainable development standards may be adopted in the future. EU legislators are concerned about the energy-intensive PoW consensus mechanism that supports blockchain such as Bitcoin. The EU's research will be completed within a year and will study green issues related to the use of water, waste, natural resources, and energy by cryptocurrencies. (CoinDesk)
  • AirBit Club Co-Founder Sentenced to 12 Years in Prison for $100 Million Cryptocurrency Pyramid Scheme

    The co-founder of AirBit Club, a cryptocurrency pyramid scheme that defrauded investors of over $100 million, has been sentenced to 12 years in prison for his involvement in the scheme. He pleaded guilty to wire fraud conspiracy charges in March and was sentenced in September. The scheme purported to be involved in crypto mining, but instead, the co-founder used victims' money to line his own pockets through a complex laundering scheme. The convicted fraudster was ordered to pay a forfeiture of $65 million and to forfeit other items, including 3,800 Bitcoins worth $100 million. Other defendants in the case have also pleaded guilty and are awaiting sentencing verdicts.
  • US SEC Delays Approval for Bitcoin Spot ETF Applications Again

    The US Securities and Exchange Commission (SEC) has once again postponed the approval of several Bitcoin spot ETF applications, including GlobalX's and Ark/21Shares'. The SEC has set a final deadline of January 10, 2024, to either approve or deny Ark's application. This delay comes after a group of congressmen sent a letter to SEC chair Gary Gensler demanding an end to discrimination against spot Bitcoin exchange-traded products. The delay may have dashed hopes of a spot ETF being approved by the end of the year, according to Bloomberg ETF analyst James Seyffart.
  • The Taiwan Financial Supervisory Commission officially released the "Guiding Principles for the Management of Virtual Asset Platforms and Trading Businesses"

    On September 26th, according to official website news, the Financial Supervisory Commission of Taiwan has officially released the "Guidelines for the Management of Virtual Asset Platform and Trading Business (VASP)", with the following key points:
  • South Korean Financial Authority: Virtual asset depositors may also be reported under the Special Financial Services Act

    South Korean financial authorities seem to have determined that virtual asset (cryptocurrency) deposit operators can also be classified as virtual asset service providers (VASPs) under the Specific Financial Information Act. The financial intelligence agency under the Financial Services Commission stated in a written reply to the office of South Korean Democratic Party Representative Lee Yong-ryoo that if virtual asset depositors engage in selling, purchasing, storing, or transferring virtual assets, they may need to report under the Special Financial Services Act.
  • Hong Kong's Securities Regulator to Publish List of Licensed and Suspicious Cryptocurrency Trading Platforms

    The Securities and Futures Commission (SFC) in Hong Kong has pledged to increase its efforts to combat unregulated cryptocurrency trading platforms in its jurisdiction. To help members of the public identify potentially unregulated virtual asset trading platforms (VATPs), the SFC will publish a list of all licensed, deemed licensed, closing down, and application-pending VATPs.
  • The Securities and Futures Commission of Hong Kong Will Publish 4 Lists of Virtual Assets and 1 List Specifically Targeting Suspicious Virtual Asset Trading Platforms

    September 25th, the Hong Kong Securities and Futures Commission (SFC) will take multiple measures to enhance information dissemination and investor education in response to recent public attention on unregulated virtual trading platforms. SFC's CEO stated that the SFC will publish four lists of virtual assets online, including licensed platform lists, closed platform lists, platforms treated as licensed but not actually licensed, and new applicant lists.
  • Shenzhen People's Bank of China: Actively promote digital RMB payment in the Shenzhen-Hong Kong Loop Cooperation Zone, based on cross-border data verification platforms such as blockchain

    On September 22, Wen Xinxian, the head of the Shenzhen branch of the People's Bank of China and the director of the Shenzhen branch of the State Administration of Foreign Exchange, led a team to investigate the He Tao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone and held a symposium on "strengthening financial support and implementing the He Tao plan". The Shenzhen branch of the People's Bank of China and the Shenzhen Foreign Exchange Bureau attach great importance to and support the development and construction of the He Tao cooperation zone. In terms of financial technology, they actively promote digital RMB payment, cross-border data verification platforms based on blockchain, big data technology, fully online financing products and services, etc., to improve the efficiency and quality of financial services.
  • Hong Kong Legislative Council Member Wu Kit-Chuang: We Have Received Help From Approximately 30 JPEX Victims, and the Amount Involved May Have Exceeded HK$100 Million.

    Hong Kong Legislative Council member Wu Jiezhuang held a press conference today (18th) to respond to the suspected fraud incident of the virtual asset trading platform JPEX. He revealed that he has received about 30 requests for help from victims, and the amounts lost by each person are different, with some being six-digit numbers and some being seven-digit numbers. The total amount involved is estimated to be over 100 million Hong Kong dollars.
  • Hong Kong Media: Hong Kong Police Are Investigating Whether Jpex Involves Criminal Elements

    According to Hong Kong media outlet am730, JPEX, a cryptocurrency exchange previously warned by the Hong Kong Securities and Futures Commission, had large-scale advertising campaigns in Hong Kong last year, including television, outdoor billboards, and bus stop lightboxes. Actor Zhang Zhihui served as the brand ambassador for JPEX, and Taiwanese singer Chen Lingjiu, who previously collaborated with MIRROR, was also a spokesperson for the exchange.