Hong Kong seeks power to jail unlicensed bitcoin trading as city looks to combat money laundering
Hong Kong will hand out US$644,054 fine and prison terms for unlicensed trading activities
Exchanges and start-ups expect smaller players to quit as the city will only permit trading by professional investors
Crypto-exchanges and start-ups welcomed Hong Kong’s move to introduce mandatory licensing for all virtual asset service providers and jail time for rogue players, saying that the proposal will likely deter non-compliant players and reduce competition.
The city’s Financial Services and Treasury Bureau published its conclusion on legislative proposals last Friday to enhance the city’s anti-money-laundering (AML) and counterterrorist financing regulation, following a two-month consultation launched in November.
While the government has affirmed its initial position of subjecting crypto-exchanges to the licensing requirements of the Securities and Futures Commission (SFC), it has also added details on how it will enforce and implement the regime. It hopes to introduce an amendment bill into the city’s legislature during its 2021 to 2022 session.