The Hong Kong Government has concluded a consultation on
proposals to regulate virtual asset service providers (VASPs),
which are, in essence, cryptocurrency exchanges. The proposed new
legislation will establish a VASP licensing regime that is intended
to apply where the VASP operates in Hong Kong or targets the Hong
Kong market. Under this licensing regime, amongst other things,
VASPs will be required to conduct customer due diligence to meet
global anti-money laundering standards and will be prohibited from
dealing with retail investors. In this article, we provide an
overview of the proposed legislation.
In May, 2021, the Hong Kong Government published its
Consultation Conclusions on Legislative Proposals to Enhance
Anti-Money Laundering and Counter-Terrorist Financing Regulation in
Hong Kong ("AML Consultation"). Amongst
other things, the AML Consultation proposes new legislation
("VASP Regulation") to amend the
Anti-Money Laundering and Counter-Terrorist
