How Hong Kong’s stricter crypto regulations aim to boost investor confidence

How Hong Kong’s stricter crypto regulations aim to boost investor confidence

Hong Kong has been a major financial hub for many years, and in recent years, it has shown increasing interest in blockchain and cryptocurrency technologies. The government of Hong Kong has indicated its support for the industry’s development, and many initiatives are underway to help create a favorable environment for crypto and blockchain businesses.

Hong Kong has a well-established regulatory framework for financial services, which has helped attract many crypto and blockchain companies. The Hong Kong Monetary Authority (HKMA) has launched several initiatives to support the development of blockchain and digital currencies. For example, the HKMA is working on developing a central bank digital currency (CBDC), and has also launched a blockchain-based trade finance platform.

Many active blockchain and cryptocurrency communities in Hong Kong provide support and resources for businesses and developers in the industry. Many events and conferences related to blockchain and cryptocurrency in the city help create networking opportunities and promote the industry’s growth.

In December 2022, the Legislative Council of Hong Kong passed an amendment to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), introducing a licensing regime for virtual asset service providers (VASPs).

Hong Kong’s New Regulatory Framework

Hong Kong has recently implemented new regulatory frameworks for cryptocurrency trading and services. The updated Anti-Money Laundering Ordinance is in line with the Financial Action Task Force (FATF) Recommendation 15, which requires virtual asset service providers (VASPs) to adhere to anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations.

The new regulations require all VASPs operating in Hong Kong to obtain a license from the Securities and Futures Commission (SFC). Without a license, individuals and businesses cannot offer VA services or declare themselves as a provider.

The Hong Kong government closely regulates all activities related to the provision of virtual asset (VA) services. The term “VA services” encompasses a broad range of electronic services that include, but are not limited to:

  • (a) Offering virtual assets for sale or purchase regularly, resulting in a binding transaction; regularly introducing or identifying persons to other parties with the purpose of negotiating or concluding virtual asset transactions that are binding or with the reasonable expectation of doing so;
  • (b) Possessing direct or indirect control over client money or client virtual assets in the provision of such services.

It is important to note that crypto trading platforms that allow trading in financial products such as securities and futures contracts are not subject to the new licensing regime, as they are already regulated under the Securities and Futures Ordinance. Another thing to note is that the new licensing requirements extend to all crypto exchanges registered in Hong Kong under the Companies Ordinance, including those based outside of Hong Kong that actively target Hong Kong citizens in their marketing efforts.

Prohibition on Unlicensed VA Service Providers

The amended Ordinance also prohibits unlicensed persons from performing regulated functions related to the business of providing VA services. Such functions may include the buying or selling of virtual assets, managing virtual asset portfolios, and providing virtual asset custodian services.

Unlicensed individuals or businesses cannot advertise VA services in Hong Kong. The SFC can take enforcement actions against unlicensed entities, including issuing fines and revoking licenses.

Impact on VASPs

The new regulations have significant implications for VASPs operating in Hong Kong. The licensing process is rigorous and requires VASPs to demonstrate compliance with AML/CFT requirements. Licensed VASPs are subject to ongoing supervision and monitoring by the SFC.

The licensing process requires VASPs to provide detailed business information, including ownership structure, management team, and risk management systems. VASPs must also conduct customer due diligence and transaction monitoring to detect and report suspicious activities.

VASPs that fail to comply with the regulatory requirements may face severe consequences, including fines, license revocation, and reputational damage. The regulations aim to promote a safe and stable virtual asset market in Hong Kong and protect the interests of investors and consumers.

Benefits of the New Regulatory Framework

The new regulatory framework for virtual asset services in Hong Kong has several benefits for VASPs and investors. Firstly, the regulations provide clarity and certainty about the legal and regulatory environment for virtual asset services in Hong Kong. This clarity can help attract more investors and businesses to the market.

Secondly, the regulations promote transparency and accountability in the virtual asset market. Licensed VASPs must maintain proper records, conduct regular audits, and report suspicious activities to the relevant authorities. These requirements can help deter fraud and other illicit activities in the market.

Thirdly, the regulations help promote a level playing field for all VASPs operating in Hong Kong. The licensing process ensures that all VASPs meet the same high standards and are subject to the same regulatory requirements. This can help create a more competitive and fair market for virtual asset services in Hong Kong.

How to get the license?

Crypto businesses must obtain a license from the Securities and Futures Commission, the regulatory body for securities and futures markets. To get a license, the business must pass a ‘fit and proper’ test that involves criminal background checks, AML/CFT performance history, financial standing, educational or other qualifications, reputation, experience, character, reliability and financial integrity of the person. The business must also apply for approval of the premises to keep records or documents required under the Ordinance. Additionally, each director of the applicant and the ultimate owner must be determined as ‘fit and proper’ to be associated with providing the VA service.

To meet the regulatory requirements of the new Ordinance, licensed crypto businesses must introduce AML/CTF measures, including customer due diligence, transaction monitoring and record-keeping, screening clients against international sanctions and watchlists for PEP status, and screening clients in adverse media. They must also comply with Travel Rule requirements and appoint an eligible auditor within one month after becoming a licensed provider. Furthermore, they must prepare financial statements and other documents for prescribed periods and submit them with the auditor’s report to the Commission within four months after the end of the financial year to which they relate.

The licensed provider must also submit an annual return to the Commission and pay a prescribed fee within one month after each anniversary of the license’s grant date. Finally, the licensed person must notify the Commission in writing of any change in information that the licensed person or ultimate owner has provided under the requirements of the Ordinance, including intended cessation of business or intention to change the address at which it proposes to provide any VA service.

Final words

The SFC will have broad powers to supervise AML/CTF and regulatory compliance by licensed VASPs, including imposing sanctions. Businesses that operate without a license or violate AML rules can face significant fines and imprisonment for senior management. In the case of fraudulent activities or deception involving virtual assets, fines can reach up to 10,000,000 HKD (1,277,000 USD) and imprisonment for up to 10 years.

The new regulations will come into effect on April 1, 2023. Some provisions, including licensing requirements, will go into effect on June 1, 2023. Businesses are advised to start preparing for the new regulations as soon as possible and reviewing their AML/CTF policies and controls to identify potential gaps in the requirements.

Overall, implementing these new regulations is expected to attract more institutional investors to the Hong Kong cryptocurrency market, as they will have greater confidence in the safety and legitimacy of the industry. The move also brings Hong Kong’s cryptocurrency regulations in line with global standards and best practices.

Hong Kong has experienced significant events since 2019 that have had a major impact on the city and its people. Hong Kong has faced many challenges, from protests and political unrest to the COVID-19 pandemic to the introduction of national security law and political changes. I hope the city’s new crypto agenda pushes a critical step forward. By embracing the opportunities of new technologies, protecting investors, and promoting transparency, Hong Kong can continue to be a leader in the global financial industry.

Some “#AnndyLian Food for Thought” before I end this article:

The Japanese government recognized early on that allowing retail investors to participate in the cryptocurrency market could help drive adoption and promote innovation. My question is: “Will Hong Kong follow Japan’s approach to allowing retail investors to trade cryptocurrencies in a regulated environment?”

This could be one of their selling points. I am eager to find out.

 

Source: https://cryptoslate.com/op-ed-how-hong-kongs-stricter-crypto-regulations-aim-to-boost-investor-confidence/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Reasons why Singaporean investor Lian is selling off Chinese equities

Reasons why Singaporean investor Lian is selling off Chinese equities

Singaporean investor Anndy Lian has been selling off Chinese equities for months in order to lessen the vulnerability of his portfolio to the second-largest economy in the world.

Once a frequent investor in Chinese software firms, Lian now sees China as a riskier investment as the economy is clouded by the nation’s autocratic turn under President Xi Jinping and ongoing “zero COVID” lockdowns.

In a conversation with Al Jazeera, Lian told that he had started gradually lowering his exposure since 2021 as that was the time when the downward trend had become obvious. He has sold off his holdings this year as things seem to have gotten worse.

He further stated that his main worry as an investor was instability. At the moment, China’s general climate is unstable, and this affects more than just the financial industry.

Lian is one of an increasing number of foreign investors who are abandoning China after several years of record inflows.

The first quarter of this year saw the biggest ever fall in foreign investors’ holdings of assets denominated in yuan from China, totaling more than USD 150 billion.

Between February and May, there was a USD 61 billion sell-off in Chinese bonds alone. Approximately USD 300 billion could leave the country this year, more than twice the USD 129 billion that left last year, according to predictions made by the Institute of International Finance, a think tank based in Washington.

As investors evaluate the risks of harsh COVID restrictions and broad crackdowns on private enterprise, which have ensnared industries ranging from tech to real estate and education, the tendency reflects an increasingly pessimistic economic picture.

After growing by 4.8% in the first quarter, China’s economy barely escaped contraction in the second quarter, expanding by just 0.4%.

The impacts of the crackdown on the IT industry last year, which wiped out the stock values of big giants like Alibaba, Tencent, and Didi, are still being felt, according to Lian.

 

Original Source: https://internationalfinance.com/reasons-investor-anndy-lian-selling-chinese-equities/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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OpenStream World Added New Backers: Angel Investor, Anndy Lian is One of them

OpenStream World Added New Backers: Angel Investor, Anndy Lian is One of them

Hanoi, 4th Jan 2022, ZEXPRWIREAnndy Lian has invested in startup tech company, OpenStream World (OSW), joining the other backers and partners into their ecosystem to help their business grow. MG Ventures, Crypto Pros, Crypto Xenos and Blockcast.cc were the newly added partners. Anndy Lian, a blockchain thought leader and investor based in Singapore has also formally announced that he has angel invested into the company at this early stage. There will be other investors annouced in the later stages.

“The journey to building our ecosystem is not easy. I am delighted to have early backers and partners involved in our startup at this current moment. We will continue to invite more partners to join our ecosystem so to build our platform in the right direction for the global target audiences.” Y Tran, Co-Founder and COO of OpenStream World said.

“The OSW founders took a different approach to share their ideas with me. They first helped to manage our Discord servers for BigONE Exchange and Asia Blockchain Community. Then they showed us how their technology is useful in the various social media. Their selling points become very obvious after showcasing to us live. This is also one of the reasons why I have decided to be their angel investor.” Anndy Lian commented.

Anndy Lian is known in the space as an early adopter and has given advice to various governments. He is currently the Chairman for Asia at BigONE Exchange and Chief Digital Advisor at Mongolia’s national productivity statutory board. He is also a book author, keynote speaker and investor.

OpenStream World is a decentralized video streaming network; built to enable scalable, easy to host, interactive online events. Tran added: “Over the past few years, the world has seen a proliferation of smartphone users, which has dramatically changed the way we produce and consume digital content. People have taken up the role of content “producer”, from recording/live streaming events, such as concerts and film festivals, to video blogs, e.g., travel, tutorial, product review, and live gaming video streaming.

Limited by the shortcomings of traditional platforms, which fail to reward the content creator and viewers adequately, we have seen in recent years the rise of platforms that reward content producers and in some cases also the viewers, leading to a win-win environment for both content producer and viewer. One of the much-anticipated use cases for blockchain-based video streaming platforms is indeed in the domain of live streaming and gaming/eSports.

Some of the major prospective advantages offered by blockchain-based video streaming applications include empowering creators and artists, blockchain-based CDNs, privacy and piracy protection, and energy-saving. Partnerships are very important at this stage of the business. We appreciate all the support we can get.”

OSW is a system that includes many products related to streaming technology and video streaming networks. The core components include:

  1. OpenStream Core: this is a platform built on blockchain, providing livestream services under the IAAS model (Infrastructure As A Service – Providing hardware infrastructure as a service).  All other products in the ecosystem will use the livestream technology from this Core set.
  2. Stream Node Forger: provides hardware resources for OpenStream Core, needs a network of Nodes from all over the world: install programs, implement transcoding algorithms for live streams. In return, the owners of the Nodes will be rewarded with tokens from the project.
  3. OpenStream Apps: This is a live streaming application that inherits the infrastructure from OpenStream Core and develops the main functions to create interaction between the livestreamer and the viewer.  In addition, you can share videos to other platforms at the same time
  4. NFT Marketplace: more than an exchange of NFT products, this is where digital product owners can promote their products.
  5. IOSO (Initial Open Stream Offering): this is a new funding mechanism for blockchain projects, it inherits some properties of the IndieGoGo fundraising platform and limits the negatives in other forms of fundraising (ICO such as ICO, etc.).

Openstream World is developed by a team with rich experience in both technology and Blockchain. They have more than 3 years of experiences in developing projects related to livestreaming and the blockchain payment mechanism, serving hundreds of thousands of users. In addition, they have members who have managed large projects such as Safemoon, and Yooshi. To date, they have more than 100,000 community members. The company is led by Founder and CTO Khoa Trinh, a graduate from HCMC University of Technology with a Bachelor degree in Computer Science and was working for LienViet Post Bank before starting OpenStream World and Co-Founder Y Tran who held many important positions such as Business Analyst, Project Manager in domestic and foreign companies.

OpenStream World will continue to work towards its goal to grow its footprints in the international markets with its decentralized technologies.

About OpenStream World

OpenStream World is a decentralized video streaming network; built to enable scalable, easy to host, interactive online events. Through the power of open source software, we optimize the use of resources like computational power and bandwidth, and use crypto-economic incentives for bootstrapping and participation; there is an opportunity here to deliver an infrastructure that can power video streaming applications at a highly efficient price, and infinite scale.

Read more: https://www.digitaljournal.com/pr/openstream-world-added-new-backers-angel-investor-anndy-lian-is-one-of-them#ixzz7HHNrI3xb

https://www.sohu.com/a/514408569_120071948?spm=smpc.sub-channel.fd-news.5.16413444001450UNl7UC

http://www.blockchaintoday.co.kr/news/articleView.html?idxno=20516

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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