Hong Kong Amends Finance Law to Incorporate Crypto Firms

Hong Kong is to subject crypto providers to the same anti-money laundering and counter-terrorist financing laws that it does traditional finance firms.

The territory's Legislative Council voted to add virtual asset service providers (VASP) to the Anti-Money Laundering and Counter Terrorist Financing Ordinance as of June 1, 2023, according to a Dec. 5 amendment to the law.

The fallout from the collapse of FTX, which was once based in Hong Kong before departing for Bahamas in September 2021, casts doubt over what crypto-friendly ambitions Hong Kong may now have. Prior to the exchange's failure early November, the territory showed signs of relaxing its tough regulations and becoming a more crypto-friendly environment. The Financial Services and Treasury Bureau said at the end of October that it was open to allowing retail customers to trade crypto or approving a virtual assets exchange-traded fund (ETF).

Last month, however, Julia Leung, the deputy CEO of the Securities and Futures Commission, called for tough rules to be implemented on crypto firms, saying that recent events had highlighted the volatility of the industry and the threats posed by its links with traditional financial services.

Read more: Hong Kong Crypto Platform Hbit's $18.1M Stuck in FTX