The HKMA said that increasing familiarity with virtual asset clients will make anti-money laundering measures easier over time, and that these firms should be treated appropriately.
The Hong Kong Monetary Authority (HKMA) reminded banks on April 27 that there is no one-size-fits-all approach when it comes to anti-money laundering (AML). Banks should not make opening an account unnecessarily difficult.
There has been a wave of companies opening bank accounts in Hong Kong to take advantage of business opportunities, and there have been “comments” about the difficulties in the process, wrote Arthur Yuen, vice president of the HKMA. Yuen linked the increase in activity to the end of the pandemic.
While conducting anti-money laundering due diligence, banks “should also treat customers fairly and increase businesses’ access to basic banking services through transparent, reasonable, and efficient procedures,” Yuen wrote. In addition:
“There are no legal and regulatory requirements prohibiting Hong Kong banks from providing banking services to virtual asset (VA) related entities.”
On the contrary, the Hong Kong government has policies to promote the development of the virtual asset industry and has a regulatory framework to protect investors. Although some virtual asset businesses pose higher anti-money laundering risks than others, the Hong Kong banking industry will have a better understanding of the industry over time. So:
“We expect regulated virtual asset service providers (VASPs) to be able to successfully apply for bank accounts through a reasonable process.”
Yuen promised to release a circular with guidance and best practices, and to hold a roundtable on “exchanging views between the banking industry and VASPs” on April 28.
Hong Kong is striving to become the world’s cryptocurrency hub and is seen by some as a possible beneficiary of the growing anti-crypto crackdown in the U.S. The territory is the first jurisdiction in Asia to offer access to cryptocurrency exchange-traded funds. A proposal to license retail cryptocurrency exchanges is in a consultation period, with guidelines for exchanges expected in May.
