As part of a move to tighten anti-money laundering regulations, the Hong Kong government is moving to license virtual-asset service providers, a proposal that has now moved past its consultation period.

  • The Securities and Futures Commission (SFC) would be provided with “necessary intervention powers” to impose restrictions or even prohibitions on companies providing crypto services, according to an announcement Friday.

  • The aim will be for the SFC to protect clients against potential misconduct from virtual asset service providers.

  • The announcement today forms the conclusion of a consultation process that ran from November 2020 to the end of January 2021.

  • This news comes soon after self-regulatory organizations in China reiterated their stance on banning crypto services. The National Internet Finance Association, the China Banking Association and the Payment and Clearing Association of China published a note confirming bans originally implemented in 2013 and 2017 that bar any services related to cryptocurrency transactions.

Update (12:00 UTC, May 21, 2021): This article has been edited to add details of government announcement.

See also: OSL, Hong Kong’s First Regulated Crypto Exchange, Commences Live Trading

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