As the largest trading market for cryptocurrency in the world, Asia has also one of its most diverse regulatory environments. Crypto regulations in Asia fall across a spectrum: while many territories have paved the way for the adoption of cryptocurrencies, others have introduced legislation to restrict and even ban them as a reaction to fraud and money laundering risks.
If you’re planning to expand your crypto business, or simply need to get to grips with prevailing AML standards for cryptocurrencies in Asia, understanding your regulatory surroundings should be your first step.
To date, Singapore has taken a permissive regulatory approach to cryptocurrency regulation: although not considered a legal tender, cryptocurrencies can be traded in the city-state and exchanges are legal. The Monetary Authority of Singapore (MAS) does not regulate virtual currencies directly but applies existing legislation to crypto exchanges with a specific focus on their associated risk activities – in particular, money laundering and terrorist financing.
Japan is regarded as having the most liberal cryptocurrency regulations in Asia – if not the world. Under Japan’s Payment Services Act, cryptocurrencies are considered legal tender and cryptocurrency exchanges are legal if registered with the Financial Services Agency (FSA). However, following a series of high profile criminal incidents, money laundering has become a significant concern for Japanese financial authorities and prompted a broad regulatory review by the FSA which was ongoing as of September 2018. In August 2018, the FSA completed a series of crypto exchange inspections, concluding that stronger vetting procedures were required for license applications.
Cryptocurrencies and exchanges are legal in South Korea but operate under some of the strictest crypto laws and regulations in Asia. The South Korean Financial Supervisory Service (FSS) closely monitors the crypto trade with a focus on AML: it has introduced government registration and reporting requirements, banned the use of anonymous trading accounts, and banned Bitcoin Futures trading in local financial institutions.
Hong Kong has a relatively liberal regulatory approach to crypto, permitting the trade and exchange of cryptocurrencies. However, since 2017, Hong Kong’s Securities and Futures Commission (SFC) has turned a closer focus on crypto markets and investments, issuing public warnings about the risks of money laundering and terrorism financing. The SFC has raised the possibility that securities laws may apply to cryptocurrencies and that exchanges may need to be registered in the future.
“As Asia becomes the epicenter of the crypto revolution, exchanges and blockchain firms must work hand in hand with the regulators and policymakers to ensure the longevity of not only their firm but also of the entire industry. At ComplyAdvantage, we’re in a unique position to help the blockchain industry reach mass adoption through compliance.”
– Joon Pak, Global Head of Blockchain, ComplyAdvantage
Need help complying with Asian cryptocurrency regulations? ComplyAdvantage’s data and solutions can help you screen customers and monitor transactions to ensure your business meets and exceeds regulatory expectations.
Our products are currently trusted by 100+ crypto-businesses across the world, get in contact today to join them in using the world’s only AI-driven AML/CFT provider.
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