Hong Kong wants to regulate cryptocurrency exchanges as strictly as banks

Hong Kong’s parliament has approved an amendment to the existing anti-money laundering (AML) and counter-terrorist financing (CTF) legal framework. acceptedwhich now also owns cryptocurrency service providers.

The new appendix formulates a new type of licensing procedure for the so-called “Virtual Property Service Providers” (VASP), which is to enter into force on June 1, 2023. According to this, in the future, cryptocurrency exchanges would be subject to the same rules as traditional financial service providers.

Any cryptocurrency exchange wishing to establish itself in Hong Kong would have to meet the relevant strict anti-money laundering and investor protection requirements in order to obtain an operating license. Hong Kong is one of the first countries to respond to the collapse of the FTX cryptocurrency exchange by tightening existing regulations.

In the wake of the FTX scandal, regulators around the world have been criticized for not doing enough to protect investors. In order to prevent a similar case from happening again, calls are now getting louder to tighten the requirements for cryptocurrency service providers.

Eddie Yue, head of Hong Kong’s stock exchange regulator, also promised at a recent conference that investor protection will also be clearly improved in the near future.

Hong Kong has long been working on developing a comprehensive legal framework for cryptocurrencies. The country’s government had already submitted the first draft of such a legal framework under the title “Declaration of Policy for the Development of Virtual Assets”.

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