Crypto assets have often been criticized by global lawmakers for being a tool to facilitate anonymous money laundering schemes. Hong Kong, which recently emerged as the world’s most crypto-ready nation, has taken a proactive step to ensure crypto assets are not misused by criminals to illegally transfer illicit funds. Amendments were made to Hong Kong’s Anti-Money Laundering (AML) and Counter Terrorism Financing (Amendment) Bill 2022 to now include crypto transactions.
Hong Kong is now trying to regulate crypto-related activities within its borders. The amended bill requires crypto companies Facilitate exchanges and payments to get a license. To obtain this license, companies must demonstrate compliance with Hong Kong’s AML rules.
“The above change will come into effect on June 1, 2023 to allow sufficient time for the preparatory work. The Hong Kong Monetary Authority will shortly consult with the banking sector on related policy changes on topical issues,” Hong Kong authorities said said in a statement.
Violating the guidelines could cost Virtual Asset Service Providers (VASPs) fines of up to US$5 million (around Rs.40 billion) and up to seven years in prison, according to a report by Wu blockchain claims.
The changed guidelines also tighten the noose Crypto Advertisersthat could put people at financial risk by promoting unauthorized projects and assets.
acc Triple-A statsHong Kong contained over 245,000 cryptocurrency holders in 2021.
Forex, at its latest “Global Crypto Readiness Report” suggested that Hong Kong is the most crypto-ready country in the world. In the index, Hong Kong has bagged 8.6 out of 10 points as lucrative for the crypto sector.
The accelerated growth of Hong Kong’s crypto industry has also attracted the attention of hackers and scammers this year.
Hong Kong observed one 105% increase in crypto scams in the first six months of this year. Between January and July 2022, the Hong Kong crypto community lost a total of $50 million (approximately Rs. 400 billion) to scammers.
Therefore, it is not surprising that the authorities there are taking steps to curb crypto crime.
Back in November, the Paris-based Financial Action Task Force (FATF) instructed Countries to adhere to their AML regulations to avoid being “grey listed”.
According to the FATF guidelines, the governments of several countries are required to collect identification information about the senders, recipients and beneficiaries of emails virtual assets. The regulations also require all VASPs to be registered and licensed in the countries.
