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Hong Kong and Abu Dhabi Configure Crypto Regulations to Align with FATF

28 February 2020 12:50, UTC
Denis Goncharenko

The Financial Action Task Force (FATF) has recently seen two new jurisdictions join its ranks in terms of the configuration of their crypto regulations.

Hong Kong was the most recent addition to this list as the city amended its oversight on the blockchain industry to better suit the demands put forward by the FATF on KYC and AML policies. In fact, Hong Kong was recently named as the first Asian jurisdiction to have passed a FATF evaluation with flying colors. The agency was quite happy with how the city performed over the course of 2019 even during the massive Hong Kong protests that more or less disrupted the local crypto market and led people towards buying Bitcoin on unregulated platforms.

The second entity that joined the ranks was Abu Dhabi. Yes, just the city, not the whole country of the UAE. The Financial Services Regulation Authority of Abu Dhabi recently announced that it will be amending its crypto regulation to better suit the FATF demands. Considering that the city is more or less a business center for many innovative corporations, it was a given that it would succumb to the agency’s demands sooner or later. Sure, it may not be at the level of Dubai, but the city holds immense importance in the Gulf region, which is slowly but surely turning into a tech hub as local economies try to diversify from oil.

Is the regulation too much?

Many would think that jurisdictions like Hong Kong and Abu Dhabi would be safe havens from all the international regulations that cryptocurrencies are facing nowadays. But just one small peek into these two cities’ crypto industries was enough to understand that a clearly defined guideline was essential for the continuation of the success.

15-11-2019 09:38:03  |   Regulation
Companies were becoming very reckless, while the investors themselves had absolutely no protection to hide behind. Most traders had to blindly trust service providers and hope that the funds they invested in cryptos did not just disappear into thin air.

The FATF guidelines are not necessarily too heavy. They simply incorporate the gathering and storing of trader data in a way that is only accessible by the service provider, the trader themselves as well as the local financial regulator upon request.

The FATF guidelines were seen in the United Kingdom where Her Majesty’s Revenue & Customs, the local taxing agency, requested private trading information from large crypto exchanges in the country. Not much came out from it besides taxing the traders in question accordingly, but that was already a part of the local regulations, so nothing illegal or severely restricting happened.

This makes Hong Kong and Abu Dhabi more attractive

Now that crypto companies are aware that these two cities guarantee their PR through a certified regulation as well as a perfect place in terms of corporate taxation, both Hong Kong and Abu Dhabi may increase their chances to become the crypto hubs they were predicted to have been in the past.