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HK Public Consultation to Introduce Licencing Regime for VA OTC

08 February 2024
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HK Public Consultation to Introduce Licencing Regime for VA OTC

The Hong Kong Government has launched a public consultation on legislative proposals to introduce a licensing regime for providers of over-the-counter (OTC) trading services of virtual assets (VA).

As fraud cases have shown the involvement of VA OTC operators, the need to regulate OTC services under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (AMLO).

To mitigate the money laundering and terrorist financing (ML/TF) risks and protect investors, the legislative proposals include:

  • Requiring any person who conducts a business in providing services of spot trade of any VA for money in Hong Kong to be licensed by the Commissioner of Customs and Excise (CCE);
  • Covering all VA OTC services irrespective of whether the services are provided through a physical outlet and/or other platforms;
  • Providing powers for CCE to supervise the anti-money laundering and counter-terrorist financing conduct of licensees, and enforce the statutory and regulatory requirements under the new regime; and
  • Providing transitional arrangement to facilitate the effective implementation of the regulatory regime.

The consultation will last for two months until April 12, 2024.
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