Hong Kong Passed New Rules For VASPs

Hong Kong lawmakers enacted legislation requiring virtual asset service companies to be licensed (VASPs).

The new laws also force financial institutions to follow consumer purchases of crypto assets more closely and codify penalties for illegally selling digital asset-related items.

In announcements issued on December 7, the Hong Kong government and the central bank confirmed the news.

According to Christopher Hui, Secretary for Financial Services and the Treasury, the improvements boost Hong Kong’s position as an international financial center.

“The amended Ordinance establishes an effective AML/CTF regulatory regime and fulfils the relevant international obligations. This, in turn, strengthens Hong Kong’s status as an international financial centre. For VA exchanges, a comprehensive and balanced regulatory framework can protect investors and promote responsible and sustainable industry development,” said Hui.

When conducting certain transactions, the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 also applies traditional customer due diligence and record-keeping requirements to VASPs. The new VASP rules are set to take effect on June 1, 2023.

According to the government announcement, licensed exchanges and wholly owned subsidiaries will be required to provide audited accounts and financial information to the Securities and Futures Commission (SFC). In addition, the regulator can access business premises for inspections and investigations.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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