Hong Kong and Abu Dhabi to change Crypto Regulations following FATF Directives
Hong Kong's Financial Secretary Paul Chan in a budget speech implied that the Hong Kong government will amend its crypto policies regarding the Anti-money laundering (AML) and Counter-terrorist financing (CTF) regime in accordance with the Financial Action Task Force (FATF) directives.
The government is hopeful that these amendments following the Financial Action Task Force’s directives will strengthen the cryptocurrency favorable environment in the country.
The Financial Action Task Force (FATF) had published a report on 4 September 2019, evaluating the AML/CFT system of member jurisdictions against international standards. The assessment report had been prepared over a period of one year assessing the regulatory frameworks of the member countries.
Overall the report was affirmative towards Hong Kong. Hong Kong’s level of compliance was observed to be aligning with FATF recommendations. Furthermore, the report suggested a few amendments to the Hong Kong’s existent Anti-money laundering (AML) and counter-terrorist financing (CTF) system to make it more effective. In the light of those recommendations, the Hong Kong government has taken steps to strengthen its crypto- regulatory regime.
New regulations Might Affect Crypto exchanges and Valuable Metal dealers
Hong Kong had been highly compliant with the Financial Action Task Force directives so far. In 2019, FATF concluded that Hong Kong has been fully compliant with the Anti-money laundering (AML) and counter-terrorist financing (CTF) guidelines. In fact, Hong Kong has become the first country that has passed the FATF regulations in the Indo Asia Pacific region.
Chan signaled that the amendments probably will affect cryptocurrency exchanges and remittance service providers. He further stated that all the details in the proposal will be published in the latter part of the year. The new alterations might be a nuisance to the dealers in precious metals and jewelry and stones as the new law will bring them under the AML/CTF framework.
The new amendments in the AML /CTF policies will be part of the 2020-21 budget of Hong Kong. The government intends to pass these amendments and frame them into law only after public consultation.
Abu Dhabi, another Asia-Pacific country to implement FATF directions for cryptocurrencies
Abu Dhabi too is stepping into the shoes of FATF regulations regarding cryptocurrencies.
Abu Dhabi Global Market (ADGM) had published a number of recommendations to the crypto framework of Abu Dhabi as per the guidelines proposed by the Financial Services Regulatory Authority last year.
Financial Services Regulatory Authority which is authority towards Abu Dhabi Global Market (ADGM) international affairs has declared on February 24 y that it will follow the FATF regulations by amending the crypto-laws of the country as per the directives. Stepping forward, it has substituted the term crypto assets by virtual assets.
The ADGM is also going to expand its regulatory class of ‘Operating Crypto asset Business’ to resolve regulatory issues including custody services, investments and operating the trading facilitates.
Abu Dhabi and Hong Kong thus have enlisted themselves in the list of countries that have given affirmation to follow crypto regulations by FATF following Singapore, South Korea, and Switzerland.
CBW - External Analyst