Financial secretary of Hong Kong Paul Chan, announced yesterday in his annual budget speech that he is considering changes of the regulation in the cryptocurrency sector to strengthen the anti-money-laundering (AML) norms and counter-terrorist-financing (CTF) policies.
Financial Secretary Chan indicated in his speech that he was following recommendations form global financial regulator, Financial Action Task Force (FATF). He promised more detailed proposals for amendments to come later in the year.
The new regulations will affect crypto exchange and precious metals dealers. Following the September 2019 evaluation, FATF rated Hong Kong as “largely compliant” with the AML/CTF guidelines. Hong Kong was the first jurisdiction to pass FAFT assessment in the APAC region.
The regulatory changes will be part of the government’s budget for 2020-2021 and after a period of public consultation they will be passed.
Financial Services Regulatory Authority (FSRA) overseeing Abu Dhabi Global Market (ADGM) also announced amendments to its crypto regulation. “Crypto asset” will change into “virtual asset” in order to align with FAFT vocabulary.
“Operating crypto asset Business” category will expand to address other related activities such as custody services, operating a trading facility and dealing in investments.
Abu Dhabi and Hong Kong are the latest jurisdictions to follow the FAFT regulations, following South Korea, Singapore and Switzerland.