INTRODUCTION
Hong Kong has traditionally been a hub for digital asset
businesses in the region. As regulators in Hong Kong are working to
tighten the regulatory regime on virtual asset exchanges, market
players and investors seeking to take advantage of the burgeoning
digital asset industry should keep up-to-date with the changing
regulatory landscape and policy trends.
In this article, we explore the recently proposed mandatory
licensing regime for virtual asset
("VA") exchanges. The proposed mandatory
licensing regime for VA trading platforms recommended by the
Financial Services and the Treasury Bureau
("FSTB") of the Hong Kong Government in
May 2021, as part of the proposed amendments to the Anti-Money
Laundering and Counter-Terrorist Financing Ordinance
("AMLO")1, seeks to replace
the existing voluntary opt-in regime. The amended AMLO was gazetted
on June 14, 2022, and the first reading of the amended AMLO was
conducted on July 6, 2022. The proposed
