The webinar discussed the proposed regulatory frameworks for virtual asset OTC services and stablecoin issuers in Hong Kong. The Hong Kong government aims to address money laundering and terrorist financing risks linked to virtual assets under the Anti-Money Laundering and Counter Terrorist Financing Ordinance (AMLO).

A licensing regime was implemented for virtual asset trading platforms (VATP) in June 2023, requiring operators to be licensed by the SFC and comply with AML/CTF provisions, limiting retail trading to major assets like Bitcoin and Ether. However, this regime does not cover over-the-counter (OTC) virtual asset trading, prompting new proposals for licensing these services under the Commissioner of Customs and Excise (CCE).

Licensing requirements for OTC services include stringent eligibility criteria and AML/CTF compliance, with enforcement powers granted to CCE. For stablecoins, a proposed regime focuses on fiat-referenced stablecoins to mitigate monetary and financial stability risks, requiring issuers to hold proper reserve assets and meet the HKMA's stringent conditions.

The proposed regimes emphasize investor protection by imposing severe penalties for non-compliance and plan transitional periods to integrate existing operators. Additionally, the HKMA introduces a sandbox initiative for testing stablecoin business models, with three participants already admitted. The overall aim is to foster safe virtual asset innovation and ensure regulatory alignment with global standards.

#VirtualAssets #HongKongRegulation #StablecoinIssuers

Timecodes: 00:00 Introduction to Hong Kong's Virtual Asset Licensing Regime 01:57 Background and Development of Hong Kong's Regulatory Framework 03:31 Licensing Regime for Centralized and OTC Trading Platforms 05:20 Eligibility and Compliance Requirements for OTC Licenses 06:58 Operational and Trading Conditions for OTC Services 08:42 OTC License Transition and Sanctions 15:12 Regulatory Framework for Stablecoin Issuers 18:30 Definition, Licensing, and Regulation of Stablecoins 28:10 Risk Management and Compliance for FRS Issuers 33:25 HKMA's Oversight and Licensing Conditions for FRS Issuers 38:44 FRS Issuance, Market Operations, and Licensing Renewal 45:44 International Cooperation and Flexible Regulatory Adjustments 50:48 Sanctions, Transitional Arrangements, and Public Awareness 54:24 Conclusion and Future Developments

Charltons Law Firm: https://www.charltonslaw.com/

Julia Charlton https://www.charltonslaw.com/the-firm/people-culture/team-profile/julia-charlton/

Don’t forget to follow our social media: LinkedIn: https://linkedin.com/company/2995759/ Facebook: https://facebook.com/charltons Instagram: https://instagram.com/charltonslaw/ Youtube: https://www.youtube.com/@charltons-law Rumble: https://rumble.com/c/c-1647355