Hong Kong to Consider Additional FATF-Style Regulations for Crypto Exchanges

Hong Kong may soon bolster its policing of the cryptocurrency sector to better conform with international anti-money-laundering norms, Financial Secretary Paul Chan said in his annual budget speech Wednesday.

Promising that “detailed proposals” will come later this year, Chan said new regulations could target virtual asset service providers, or VASPs, the catchall term used by the Financial Action Task Force (FATF) in its latest “Travel Rule” guidance.

New regulations could raise the heat on crypto exchanges, OTC desks and brokers in Hong Kong, a global crypto hub. Such entities are already monitored by the Hong Kong Monetary Authority (HKMA), which in December recommended that VASPs stay vigilant in self-regulating their customers’ goings-on.

“[Authorized institutions] should keep abreast of international and local developments to maintain an up-to-date understanding of risks, and apply a risk-based approach that supports responsible financial innovation as well as…