Regulators in Hong Kong are preparing to tighten their policies in relation to crypto exchanges, as part of a crackdown recommended by an international money laundering watchdog.
The Hong Kong government will introduce more stringent controls on anti-money laundering and terrorist financing to strengthen its oversight of the sector, following recommendations from the Financial Action Task Force (FATF), the Hong Kong Economic Times reported.
The move comes after the FATF recommended changes in policy in Hong Kong to comply more closely with its standard guidelines for regulators, designed to ensure the most effective controls against money laundering and other financial crimes through cryptocurrency.
The changes were proposed as part of the 2020 budget in Hong Kong, and will now be subject to a period of public consultation before becoming law.
It comes amid a wider drive from the G20 to improve standards around cryptocurrency exchange regulation worldwide, with the international body keen to encourage a greater degree of compliance from both regulators and individual exchanges.
In a statement on February 23, the G20 said it was appropriate for these risks to be “evaluated and appropriately addressed” before crypto exchanges should be allowed to operate.
Building on the 2019 Leaders’ Declaration, we urge countries to implement the recently adopted Financial Action Task Force (FATF) standards on virtual assets and related providers. We reiterate our statement in October 2019 regarding the so-called ‘global stablecoins’ and other similar arrangements that such risks need to be evaluated and appropriately addressed before they commence operation, and support the FSB’s efforts to develop regulatory recommendations with respect to these arrangements.
It comes at a time of increasing moves by regulators worldwide to tighten up their controls over cryptocurrency and exchange operators.
Regulators in South Korea and Japan are reported to be taking similar steps to comply more closely with the Financial Action Task Force’s most recent guidance.
Alongside crypto exchanges, the Hong Kong measures are also thought to target other crypto businesses, including crypto remittance services, which could also fall within the remit of the revised regulations.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.