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AML & Financial Services Regulatory

Hong Kong: New virtual asset OTC trading regulatory regime

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In brief

On 8 February 2024, the Financial Services and the Treasury Bureau of Hong Kong (FSTB) released a public consultation (“Consultation“) on legislative proposals to introduce a licensing regime (“Proposed Regime“) for providers of over-the-counter (OTC) trading services of virtual assets (VA). The Proposed Regime will be regulated by the Commissioner of Customs and Excise (CCE). In view of recent fraud cases involving VA OTC operators and the large scale of VA OTC operators in Hong Kong, the Hong Kong Special Administrative Region Government (Hong Kong Government) sees the need to regulate. The Consultation represents the latest step in the city to further enhance the VA regulatory framework as outlined by the Hong Kong Government in its 2022 Policy Statement on Development of VA in Hong Kong.1 The consultation will end on 12 April 2024. We discuss the Consultation in more detail below.

Click here to access the full alert.

1 https://gia.info.gov.hk/general/202210/31/P2022103000454_404805_1_1667173469522.pdf

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Grace Fung is a partner in Baker McKenzie’s Financial Services group.

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Karen Man is a partner in Baker McKenzie’s Financial Services group, leading the non-contentious Financial Services Regulatory practice. Her clients include global, Chinese and local banks, fund managers, brokers/dealers, money service operators and fintech firms. Karen is admitted to practice in Hong Kong, the UK, and Australia.

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Samantha Lai is a Special Counsel in Baker McKenzie, Hong Kong office.

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Erin Cao is a Registered Foreign Lawyer in Baker McKenzie, Hong Kong office

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Aaron Dauber is a Registered Foreign Lawyer and the Knowledge Lawyer for Baker McKenzie's non-contentious Financial Services Regulatory practice. He is responsible for monitoring and training on regulatory change, legal content projects and other knowledge initiatives to support the firm and our clients. Aaron's experience includes over 13 years' as an in-house counsel responsible for legal support to businesses across the Asia Pacific region including Japan and Australia with a global systemically important bank.

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