TechFlow news, on February 14, according to Hong Kong Wen Wei Po, Hong Kong has implemented regulation on cryptocurrency exchanges, but only nine licensed exchanges currently exist, primarily serving professional investors. Hong Kong SAR Legislative Council member Ng Kit-ching stated that Hong Kong's cryptocurrency regulation will introduce a new mechanism this year. The SAR government will establish a licensing regime for over-the-counter (OTC) cryptocurrency trading and require OTC operators to comply with anti-money laundering (AML) and customer due diligence (KYC) requirements under the Anti-Money Laundering Ordinance.
In addition, license holders will only be permitted to conduct spot transactions between virtual assets and fiat currencies, and must register and monitor business wallets and transaction records. The Commissioner of Customs, serving as the regulator, will be responsible for approving licenses, conducting routine inspections, investigating violations, and imposing penalties. Offenders may face a maximum fine of HKD 1 million or two years' imprisonment. Regarding KYC verification, the SAR government recommends verifying customer identities, assessing and documenting the purpose and nature of customer transactions, and continuously monitoring transaction activities.
