The Financial Services and the Treasury Bureau (FSTB) published the Consultation Paper on the proposed licensing regime for providers of over-the-counter (OTC) trading services of virtual assets (VA).
Due to instances of fraud involving VA OTC operators, there is a necessity to regulate OTC services under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) to reduce money laundering and terrorist financing risks and safeguard investors. The key points of the proposals include:
a. Requiring any individual conducting a business that offers spot trading services for any VA in exchange for money in Hong Kong to obtain a license from the Commissioner of Customs and Excise (CCE).
b. Encompassing all VA OTC services, regardless of whether they are provided through a physical location and/or other platforms.
c. Granting powers to the CCE to oversee the anti-money laundering and counter-terrorist financing practices of licensees and enforce the statutory and regulatory requirements under the new regime.
d. Establishing a transitional arrangement to facilitate the smooth implementation of the regulatory framework.
Please read the Consultation Paper HERE and provide any comments on or before Friday 15 March 2024 with membership numbers and contact details to research@hkcgi.org.hk. Depending on views received by the Institute, if any, the Institute may consider making a submission.