The Hong Kong Monetary Authority (HKMA) on Tuesday issued an 11-page circular on tokenization and digital asset custody standards for local approval bodies.
that much document It asked institutions to commit to comprehensive risk assessments and allocate sufficient resources for proper governance and risk management of cryptocurrency custody services. The HKMA also requested that companies establish internal policies to appropriately address potential or existing conflicts of interest.
These approved entities must also segregate customer assets from company assets and maintain emergency and disaster recovery plans to “reduce the risk of loss of customer digital assets due to acts of theft, fraud, negligence, or other abuse, as well as the risk due to delays or delays in access.” do.” HKMA guidelines state that access to customer digital assets is not possible.
Other requirements from the Central Bank of Hong Kong include full disclosure of the risks associated with cryptocurrency custody arrangements and compliance with anti-money laundering and counter-terrorist financing guidelines.
The HKMA states: “The relevant body (an approved body) or the relevant local corporate approved body (whose subsidiary is already engaged in such activities) must notify the HKMA and ensure that it meets the expected standards in the Annex within six months from the date of this circular. “said the HKMA. famous.
Instructions are as follows hong kong The latest move to regain its status as Asia’s cryptocurrency hub. In June 2023, the region officially launched a cryptocurrency licensing regime for virtual asset trading platforms, allowing licensed exchanges to offer retail trading services. Hong Kong has licensed two platforms: HashKey and OSL.
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About the author
Danny Park is The Block’s East Asia reporter, writing about topics including Web3 development and cryptocurrency regulation in the region. He previously worked as a reporter for Forkast.News, where he actively covered the fall of Terra-Luna and FTX. Based in Seoul, Danny previously produced written and video content for media companies in Korea, Hong Kong and China. He holds a Bachelor’s degree in Journalism and Business Marketing from the University of Hong Kong.