HK Crypto Law & Financial Crime Legal Consulting

The rise in Crypto related crime and theft in recent years has become very public news following the demise of FTX; however cyber crime, crypto crime or digital-based frauds have been around for many years with billions in assets having been moved or lost, leaving owners a long struggle to locate and recover funds mired in highly mobile digital technologies.

The HKSAR is now cracking down hard on these type of frauds, with a dedicated cyber crime section the Cyber Security and Technology Crime Bureau (CSTCB) of the Hong Kong Police  are both proactive and well-resourced:

https://www.police.gov.hk/ppp_en/04_crime_matters/tcd/index.html

One reason for the increased activity in criminal enforcement might be as HK is about to be a global leader in the licensing of crypto exchanges. Combining this progress with this push to remove bad actors from the HK market, discourage unregulated activity and ensure HK is a trusted location is entirely logical.

Hong Kong Crypto Law and New Exchange Regulations

On June 1, 2023, Hong Kong launches a new licensing regime for virtual asset service providers (VASPs), such as cryptocurrency exchanges. This will also see the anti-money laundering (AML) and investor protection standards imposed so as to foster a vibrant and safe environment and open the banking sector up to access: as the HKMA has stated.

“….with the implementation of the regulatory regime for VA activities in Hong Kong and the strengthening of supervisory regimes in different jurisdictions according to the international standards, and as the banking industry develops a better understanding of the VA industry over time, we expect that regulated virtual asset service providers (VASPs) will be able to successfully apply for a bank account through a reasonable process.”

https://www.hkma.gov.hk/eng/news-and-media/insight/2023/04/20230427/

The Hong Kong Monetary Authority (HKMA) will enhance regulatory oversight and supervision of VASPs and Financial Action Task Force (FATF) recommendations on combating money laundering and terrorist financing risks associated with virtual assets will be involved.

It is likely there will be more enforcement against fraud or misconduct related to virtual assets, cryptocurrencies, stablecoins, tokens, and digital representations of fiat currencies. The confidence that effective enforcement brings will attract more investors to HK, spur innovation in the sector, and improve  Hong Kong’s position as a well-regulated leading global financial hub even if it leads to more investigations, arrests and prosecutions in the near term.

If you need assistance with crypto or financial regulatory concerns please click on the button below and contact HK Lawyer AJ Halkes (Barrister-at-Law) for a Chat!