Hong Kong to Crack Down on Money Launderers Using Crypto
- Hong Kong seeks to address the risks posed by cash-for-crypto shops post-the JPEX scandal.
- The HK Customs head said it is ramping up international cooperation to crack down on money launderers.
- She noted that there is “always room to improve the law enforcement and surveillance regime.”
- Owners of such shops were among the 28 people arrested in the JPEX crypto exchange scandal.
As per a new report, Hong Kong is set to increase its crackdown on money launderers that utilize cryptocurrencies. The authorities are set to address the risks posed by cash-for-crypto shops after the JPEX crypto scandal revealed the vulnerabilities of the regulatory system. The special administrative region (SAR) of China seeks to reduce such activities.
According to a SCMP report, Louise Ho Pui-shan, the commissioner of the Hong Kong Customs and Excise Department, said the agency is ramping up international cooperation to crack down on money launderers found taking advantage of the anonymity of cryptocurrency transactions. She also added that the SAR has seen an increase in money laundering cases using crypto, especially in large-scale schemes.
While regulator money exchange platforms are under increased regulatory scrutiny by the Hong Kong Customs and Excise Department, the over-the-counter (OTC) cryptocurrency versions are yet to be subjected to any licensing or regulatory framework. Interestingly, owners of such stores were included in the list of 28 people who were responsible for the JPEX crypto exchange scandal.
Some of the owners of these OTCs promoted JPEX’s investment offerings, which the Hong Kong Securities and Futures Commission (SFC) described as “too good to be true.” Additionally, Ho noted that, in light of the JPEX scandal, the authorities and “relevant regulatory agencies” were looking into ways of governing such shops.
“There are two aspects to [regulating] these OTC exchange shops. One aspect involves combating money laundering and terrorist financing, and the other is investor protection,” she said while speaking at a television program.
She said that if the “regulatory regime needs to be improved in the future, both aspects must be taken into account,” while noting there is “always room to improve the law enforcement and surveillance regime.” Meanwhile, the Hong Kong Customs’ Commissioner also did not confirm if it was her department that was tasked with the job of regulatory crackdown.
As reported earlier by BitcoinWisdom, the Hong Kong Monetary Authority (HKMA) recently issued a stern warning to local investors dealing with cryptocurrency companies, especially those who describe themselves as banks.