Hong Kong has announced that it has reviewed its Anti Money Laundering and terrorism financing framework to include assets providers. With this update, assets providers will be subjected to a new framework which will be effective starting from June 2023. The latest update will also classify crypto exchanges in the same bracket as traditional finance regarding the laws and regulations guarding them.
Hong Kong tightens exchange regulations
This new update also means that any entity seeking to start its crypto exchange must undergo a tough process. These processes include subjecting itself to AML laws while proving that it can protect its consumers. After these steps, the exchange will be granted a permanent license to operate freely across the country. Hong Kong is using this recent FTX mishap to eliminate the risks that users who patronize centralized exchanges are subjected to.
After the FTX collapse some weeks ago, there has been a widespread call by regulators for countries to provide adequate protections for users. After the incident, users have also called on regulators to enforce strict laws on exchanges, which means that they will face stricter scrutiny than before.
The country wants to create a strong crypto framework
At a recent conference in the country, one of the top officers in the government mentioned that they are presently considering regulations that will help to protect users against the actions of crypto exchanges. This update has also put the country at the forefront regarding countries taking preventive measures to protect users. On a broader scale, Hong Kong has been working actively to create a strong regulatory framework for the crypto market in the country.
In October, the government released a policy document that dealt with the declaration of digital assets in the holdings of users and entities. The country is also looking to kickstart several projects in the space to enable a wider reach, provide education to the people and improve the present situation in the blockchain sector in the country. With the country currently looking into the regulation of crypto, China could well be a beneficiary in this sense.