The Hong Kong government has announced plans to strengthen regulations on over-the-counter (OTC) trading of digital assets by subjecting it to the same requirements as retail digital assets trading.
This was outlined in their “Public Consultation on Legislative Proposals to Regulate Over-the-Counter Trading of Virtual Assets,” which will run until April 12.
The main proposal is to bring OTC trading under the scope of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) starting in June 2023. OTC refers to direct transactions between a provider and a customer without the use of a centralized marketplace, such as an exchange.
The government suggests that only spot trading of virtual assets for money will fall under the OTC category, while standard virtual assets trading will continue to require a VATP license. Peer-to-peer trading will not be affected by these changes.
The government estimates that there are around 200 physical VA OTC outlets (including ATMs) and approximately 250 digital platforms or active online posts offering VA services in Hong Kong.
