On Feb. 26, Hong Kong’s financial secretary Paul Chan stated that his administration will strengthen its Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) policies regarding cryptocurrencies.
In his recent budget speech, Chan indicated that the amendments will address recommendations made by global financial watchdog, the Financial Action Task Force (FATF).
New regulations to affect crypto exchanges, precious metals dealers
The FATF assessed that Hong Kong was “largely compliant” with its AML/CTF guidelines following a September 2019 evaluation. The assessment saw Hong Kong become the first jurisdiction in the Asia-Pacific region to pass the FATF's appraisal.
The proposed changes to Hong Kong’s AML/CTF policies have been put forward as part of the government’s 2020–21 budget, and will be passed into law following a period of public consultation.
Chan indicated that the amendments will predominantly affect cryptocurrency exchanges and remittance service providers, adding that “detailed proposals” will be published later this year.
Dealers in precious metals, stones, and jewelry will also be brought under the new AML/CTF framework.
Abu Dhabi changes crypto regulations to align with FATF
On Feb. 24, the Financial Services Regulatory Authority, one of three regulators overseeing the Abu Dhabi Global Market (ADGM), announced amendments to its crypto regulations. The changes include changing the term “crypto asset” to “virtual asset” to align with FATF vocabulary.
The ADGM will also expand its regulatory category of “Operating a Crypto Asset Business” to address other regulated activities that relate to crypto businesses including custody services, operating a trading facility and dealing in investments.
Abu Dhabi and Hong Kong comprise the latest jurisdictions to update their crypto regulations in response to recent FAFT directives, following South Korea, Singapore, and Switzerland.