The local government of Hong Kong has opened public comment on the proposed regulations for the over-the-counter trading of virtual assets in the province.
The public consultation opened on Thursday about proposed regulations for a licensing system for companies that offer over-the-counter (OTC) trading services for virtual assets. The consultation period is set to expire on April 12, 2024.
“The legislative proposals constitute an important element in the Government’s efforts to develop a robust and transparent regulatory environment for the sustainable development of virtual assets and Web3,” according to a representative of the Hong Kong government
Additionally, he stated that the proposed licensing framework for over-the-counter service providers of virtual assets will effectively limit the risks associated with money laundering and terrorist financing (ML/TF) and provide investor protection.
One of the main features of the proposed legislation is that anyone running a business that offers services for the spot exchange of any virtual asset for cash in Hong Kong must obtain a license from the Commissioner of Customs and Excise of Hong Kong.
The recommendations cover all over-the-counter virtual asset services, whether they are provided through physical stores or other platforms.
Along with implementing legislative and regulatory obligations under the new regime, the regulatory framework also intends to extend powers to the CCE to supervise virtual asset licensees’ anti-money laundering and counterterrorism funding activities.
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