Implementation of the Virtual Asset Service Providers Licensing Regime in Hong Kong

December 2022

On 7 December 2022, the Legislative Council passed the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 (‘Amendment Bill’) which introduced, among other things, a mandatory licensing regime for virtual asset service providers (‘VASP Licensing Regime’). The Bills Committee of the Legislative Council, on the same day, published a report (‘Report’) under which the Government clarified its position in relation to certain issues (namely, the provision of services to Professional Investors, and the applicability of the VASP Licensing Regime to non-fungible tokens), and postponed the commencement of the VASP Licensing Regime. 

In this update, we will provide a summary of the Report and some insights into what it means for market participants. For a review of the VASP Licensing Regime under the original Amendment Bill, please refer to our News Flash issued in July 2022.