Money Laundering Concerns Prompt Hong Kong Banks to Reject Crypto Transactions
Despite the Hong Kong government’s encouragement, two banks have rejected crypto activities due to anti-money laundering regulations.
Although the government has encouraged the licensing of crypto exchanges, two banks have rejected these applications. Despite Hong Kong’s bullish outlook on crypto, its banks are not so confident. Banks in Hong Kong have resisted servicing licensed crypto exchanges due to money laundering concerns and risk-management models.
Recent concern surrounding anti-money laundering procedures slowed the Chinese crypto narrative. Crypto firms have been invited into Hong Kong’s Special Administrative Region (SAR), but these exchanges have trouble finding traditional banks to bank with.
A new licensing regime now governs cryptocurrency exchanges, but two global banks have refused to participate in cryptocurrency trading. Government officials in Hong Kong are unable to help crypto exchanges set up accounts because banks are not opening accounts for them. Regulators in Hong Kong have difficulty regulating crypto firms to become a crypto hub despite the government’s efforts.
A crackdown on cryptocurrencies continues by the US Securities and Exchange Commission (SEC) even as Hong Kong attempts to streamline services for crypto exchanges and firms. US regulators, along with the central bank, commented in January of 2023 on inconsistencies in banking practices and cryptocurrencies being issued and held. Whilst the government pushes the “China crypto narrative”, Hong Kong’s banking institutions will probably encounter these hurdles.
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