HKMA Now Urges Banks To Embrace Crypto Exchanges Despite Legal Risks
Key Points:
- Hong Kong’s banking regulator encourages banks to accept crypto exchanges as clients, but they are reluctant due to fears of potential prosecution for money laundering or other illegal activities.
- HKMA emphasized that due diligence on potential customers should not create an undue burden, particularly for those setting up an office in Hong Kong to seek opportunities.
Hong Kong’s banking regulator, the Hong Kong Monetary Authority (HKMA), encourages banks to accept crypto exchanges as clients. Lenders, including HSBC and Standard Chartered, have not banned crypto clients, but they are reluctant to take on exchanges over fears of potential prosecution if the platforms are used for money laundering or other illegal activities.
At a meeting held last month, the HKMA questioned the UK-based lenders and Bank of China about their reluctance to accept crypto exchanges as clients. The HKMA emphasized that due diligence on potential customers should not create an undue burden, particularly for those who are setting up an office in Hong Kong to seek opportunities.
The HKMA’s stance comes amid Hong Kong’s efforts to establish itself as a global center for the crypto industry, despite a series of high-profile and damaging collapses, including the implosion of FTX. Banks are walking a fine line between supporting crypto and exchanges as they receive encouragement from the HKMA, but they are also wary of the US situation.
This month, the US Securities and Exchange Commission sued Binance and Coinbase, two of the world’s largest crypto exchanges, accusing them of violating US securities laws. While Hong Kong has a history as a crypto center, its position diminished in the wake of Beijing’s crypto crackdown, which began in 2017. Nevertheless, Hong Kong has signaled that it wants to re-establish itself as a hub for the industry. The government said in October that it wants to provide a “facilitating environment” for digital assets groups.
HSBC, Standard Chartered, and Bank of China have a special role in Hong Kong as issuers of the city’s currency and hold the chair and two vice-chair posts at the Hong Kong Association of Banks lobby group. Regarding the HKMA’s stance, Standard Chartered said that it had “regular dialogue with our regulators on different subjects,” while HSBC said that it was “very engaged on policies and developments of this nascent industry in Hong Kong.” Bank of China declined to comment.
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.
Join us to keep track of news: https://linktr.ee/coincu
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HKMA Now Urges Banks To Embrace Crypto Exchanges Despite Legal Risks
Key Points:
- Hong Kong’s banking regulator encourages banks to accept crypto exchanges as clients, but they are reluctant due to fears of potential prosecution for money laundering or other illegal activities.
- HKMA emphasized that due diligence on potential customers should not create an undue burden, particularly for those setting up an office in Hong Kong to seek opportunities.
Hong Kong’s banking regulator, the Hong Kong Monetary Authority (HKMA), encourages banks to accept crypto exchanges as clients. Lenders, including HSBC and Standard Chartered, have not banned crypto clients, but they are reluctant to take on exchanges over fears of potential prosecution if the platforms are used for money laundering or other illegal activities.
At a meeting held last month, the HKMA questioned the UK-based lenders and Bank of China about their reluctance to accept crypto exchanges as clients. The HKMA emphasized that due diligence on potential customers should not create an undue burden, particularly for those who are setting up an office in Hong Kong to seek opportunities.
The HKMA’s stance comes amid Hong Kong’s efforts to establish itself as a global center for the crypto industry, despite a series of high-profile and damaging collapses, including the implosion of FTX. Banks are walking a fine line between supporting crypto and exchanges as they receive encouragement from the HKMA, but they are also wary of the US situation.
This month, the US Securities and Exchange Commission sued Binance and Coinbase, two of the world’s largest crypto exchanges, accusing them of violating US securities laws. While Hong Kong has a history as a crypto center, its position diminished in the wake of Beijing’s crypto crackdown, which began in 2017. Nevertheless, Hong Kong has signaled that it wants to re-establish itself as a hub for the industry. The government said in October that it wants to provide a “facilitating environment” for digital assets groups.
HSBC, Standard Chartered, and Bank of China have a special role in Hong Kong as issuers of the city’s currency and hold the chair and two vice-chair posts at the Hong Kong Association of Banks lobby group. Regarding the HKMA’s stance, Standard Chartered said that it had “regular dialogue with our regulators on different subjects,” while HSBC said that it was “very engaged on policies and developments of this nascent industry in Hong Kong.” Bank of China declined to comment.
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.
Join us to keep track of news: https://linktr.ee/coincu
Thana
Coincu News
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