HKMA Releases Guidelines for Digital Asset Custody in Hong Kong
The Hong Kong Monetary Authority (HKMA) issued an 11-page circular outlining its standards for tokenization and digital asset custody for locally authorized institutions.
The document emphasizes the importance of comprehensive risk assessments and proper governance for crypto custody services. It mandates the segregation of client assets from company assets, urging entities to establish internal policies addressing conflicts of interest. The HKMA guidance also emphasizes the need for contingency and disaster recovery plans to mitigate the risk of loss or inaccessibility of client digital assets.
Requirements include full disclosure of risks, compliance with anti-money laundering and counter-terrorism financing guidance, and a notification to the HKMA confirming adherence to standards within six months. This move aligns with Hong Kong’s efforts to reestablish itself as Asia’s crypto hub, exemplified by the introduction of a crypto licensing regime in June 2023. Two platforms, HashKey and OSL, have already received licenses.
Clever Robot News Desk 23rd February 2024
