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Hong Kong’s Commissioner of Customs and Excise, Louise Ho Pul-shan, has urged to enhance the security and monitoring measures in the crypto exchange to combat money laundering and terrorist financing.
Hong Kong’s customs commissioner claimed that crypto transactions are not adequately monitored and complied with regulatory measures to prevent money-laundering risk in the virtual asset sector. This action was called after the $191 million JPEX scandal that exposed the loopholes in the city’s upholding system with the AML measures. The October 2023 unstretched JPEX scandal shows various vulnerabilities in Hong Kong’s existing regulatory compliance legal framework for the virtual asset industry. The side effect of this scam forced the governor to take rigid steps in monitoring the crypto exchange. Especially regulating digital currency exchange service providers to oversight the cash into cryptocurrency.
The customs commissioner stresses the two essential fundamentals of why it is urgent to regulate over-the-counter (OTC) shops. The first is the confidentiality in crypto transactions, which amplifies money laundering and terrorist financing. The second relates to the JPEX scandal, where some OTC shops promoted fake crypto trading platforms without concern they can not be “too good to be true.” The commissioner also emphasised the enhanced oversight regulation will garner attention and raise the hopes of the Customs and Excise Department, which might extend their investigation to the OTC crypto exchanges. Although the commissioner did not discuss current regulations, regulatory authorities are designing under the governor’s orders.
Hong Kong has recently faced many money-laundering cases linked to cryptocurrency exchange platforms. The proliferating crypto scams raise concern about AML derivatives and how to regulate the anonymous nature of transitions in virtual assets. Ho Pul-shan, stressed upholding international standards and regulations to combat money laundering in Hong Kong. The exploit in digital currency also evades the stability of the global financial ecosystem. Hong Kong constantly collaborates with the international regulatory authorities to create a stable digital currency sector.
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