• Hong Kong is attempting to reclaim its status as a cryptocurrency powerhouse.
• Hong Kong is deciding on specific fines and prison terms for breaking the law.
• In recent months, cybercriminals have flocked to Hong Kong.

The use of cryptocurrency as a tool to aid anonymous money laundering operations has drawn criticism from international politicians on numerous occasions. Hong Kong, which just became the country with the best crypto infrastructure in the world, has taken preemptive measures to prevent the illegal use of cryptocurrency assets for the transfer of illicit funds. Hong Kong has amended the Anti-Money Laundering (AML) and Counter-Terrorist Financing (Amendment) Bill 2022 to include cryptocurrency transactions.

At the moment, Hong Kong is making an effort to regulate internal crypto-related activity. Companies that facilitate bitcoin exchanges and payments are required to seek a licence, per the amended bill. On June 1, 2023, the aforementioned modification will take effect, allowing plenty of time for planning. 

The Hong Kong Monetary Authority will soon discuss the banking sector with necessary changes to the rules pertaining to the present issues. Wu Blockchain said that breaking the guidelines might result in fines of up to $5 million (about Rs. 40 crore) and up to seven years in prison for virtual asset service providers (VASPs).

 The revised rules also tighten the noose around cryptocurrency advertising that might be putting customers at danger of financial harm by endorsing illegal projects and assets. In 2021, there were approximately 245,000 cryptocurrency owners in Hong Kong, according to Triple-A statistics. 

Hong Kong is the country that is most prepared for cryptocurrency, according to Forex's most recent 'Worldwide Crypto Readiness Report.' Hong Kong scored 8.6 out of 10 on the profitability rating for the cryptocurrency industry. Because of the bitcoin industry's explosive growth this year, hackers and scam artists have been attracted to Hong Kong. 

Hong Kong has seen a 105% spike in cryptocurrency frauds in the first half of this year. Between January and July 2022, scammers stole $50 million (or around Rs. 400 crore) from the Hong Kong cryptocurrency community.