Tag Archives: AML/CFT

Content related to anti-money laundering and counter-terrorism financing (AML/CFT) compliance, customer due diligence, and risk management.

When a Hong Kong licensed company encounters a PEP or high-risk client, to what extent should the EDD and approval processes be intensified?

When a Hong Kong licensed company encounters a PEP (Peace of the Premises) or a high-risk client, the EDD (Executive Distributor) must adjust its risk level accordingly: PEPs require approval from senior management before establishing or maintaining a business relationship, and the source of funds and wealth must be verified; high-risk clients require enhanced continuous monitoring (usually reviewed at least every 6 months), supplementing evidence of beneficial owners, source of funds, purpose of transactions, and sanctions/PEP screening. If insufficient, limits should be tightened, services suspended, or withdrawal considered.

28
June
How are records and approvals documented when Hong Kong MSO processes refunds or canceled transactions?

When processing refunds or transaction cancellations, Hong Kong MSOs must maintain a complete record covering all four stages: initiation, approval, execution, and review. This record must include: who initiated the refund, the reason given, who approved it within the specified amount threshold, how the funds were returned to the original payment method, how the system recorded the transaction, and whether reconciliation and independent review were completed. A simple "refund completed" statement is insufficient; instead, a verifiable chain of evidence must be established, linking customer instructions, approval records, fund flow, reconciliation results, and any escalation of issues.

28
June
Under Hong Kong's VA Dealing system, why can't client asset delivery and transaction processing be viewed together?

Once Hong Kong VA OTC business involves quoting, matching, or processing transactions on behalf of clients, it cannot be handled simply as ordinary consultation, client referral, or MSO. It is necessary to clarify who quotes the price, who finds the counterparty, who confirms the transaction, who receives and pays fiat currency, who settles the virtual assets, and whether the transaction involves Hong Kong clients.

28
June
When a Hong Kong financial institution is targeted by sanctions screening, how should the freezing, reporting, and ongoing monitoring be coordinated?

When a Hong Kong financial institution is identified during a sanctions screening, it must first confirm whether it is a genuine match and not a false alarm due to a name mismatch. Once a match is confirmed, the relevant assets should be frozen or transactions restricted immediately, and the relevant authorities should be notified (the CED should be notified when Hong Kong is involved). At the same time, the identified clients should be transferred to continuous monitoring and escalation review, and a complete record of the screening, confirmation, freezing, and reporting should be kept.

28
June
Brazil's central bank has introduced new regulations: transfers exceeding $1 from escrow wallets will be subject to reporting and delayed by 24 hours.
Brazil's central bank has introduced new regulations: transfers exceeding $1 from escrow wallets will be subject to reporting and delayed by 24 hours.

The Central Bank of Brazil issued Resolution 584/2026, bringing virtual asset transfers exceeding $10,000 to self-custodied wallets or offshore VASPs under a delay and reporting regulation: any single transfer or cumulative transfers of such amounts exceeding $10,000 on the same day must be delayed for up to 24 hours and reported to the Committee on Control of Financial Activities (COAF). The reporting rule is effective October 2026.

25
June
South Korean police investigate cryptocurrency futures investment consulting firm: More than 20 investors have been victimized, alleging risks related to undeclared exchanges.
South Korean police investigate cryptocurrency futures investment consulting firm: More than 20 investors have been victimized, alleging risks related to undeclared exchanges.

This article summarizes the progress of the South Korean police investigation into a cryptocurrency futures investment consulting firm: media reports indicate that more than 20 investors have been victimized, but the police are still verifying the exact number and losses; the incident also highlights the operational and compliance risks of unregistered virtual asset exchanges.

10
June
When a Hong Kong MSO changes its business location, agency, or online channels, is it necessary to notify Customs in advance?
When a Hong Kong MSO changes its business location, agency, or online channels, is it necessary to notify Customs in advance?

When a Hong Kong MSO changes its place of business, agency, or online channels, it should first determine whether it will affect license information, actual place of business, customer contact, record keeping, agency authority, and online account opening/trading process. If it affects any regulated fact, a change assessment and necessary notification or declaration should be completed before the change is implemented.

28
June
How should business be diverted between Hong Kong VA OTC, MSO, VATP, and managed services?
How should business be diverted between Hong Kong VA OTC, MSO, VATP, and managed services?

Hong Kong VA OTC and MSO are not the same thing. MSO mainly focuses on remittance, exchange, and money services; VA OTC/VA Dealing is closer to the buying, selling, quoting, execution, arranging transactions, and transaction services of virtual assets. As of June 2026

28
June
What materials and compliance systems do cross-border payment teams typically need to prepare before applying for a Hong Kong MSO?
What materials and compliance systems do cross-border payment teams typically need to prepare before applying for a Hong Kong MSO?

When dealing with Hong Kong MSO issues, one should first examine whether the business involves remittance, exchange, money change, or cross-border fiat currency receipts and payments. Then, one should verify customer due diligence, source of funds, purpose of payment, transaction monitoring, STR upgrades, and record keeping. One cannot simply look at whether there is a license name.

28
June
What is the difference between VA OTC and MSO in Hong Kong?
What is the difference between VA OTC and MSO in Hong Kong?

Hong Kong VA OTC and MSO are not the same thing. MSO mainly focuses on remittance, exchange, and money services; VA OTC/VA Dealing is closer to the buying, selling, quoting, execution, arranging transactions, and transaction services of virtual assets. As of June 2026

27
June
After obtaining a Hong Kong MSO license, how are transaction monitoring and suspicious transaction reporting typically implemented?
After obtaining a Hong Kong MSO license, how are transaction monitoring and suspicious transaction reporting typically implemented?

When dealing with Hong Kong MSO issues, one should first examine whether the business involves remittance, exchange, money change, or cross-border fiat currency receipts and payments. Then, one should verify customer due diligence, source of funds, purpose of payment, transaction monitoring, STR upgrades, and record keeping. One cannot simply look at whether there is a license name.

27
June
When Hong Kong money change services integrate online orders, how should store records and system logs be reconciled?
When Hong Kong money change services integrate online orders, how should store records and system logs be reconciled?

When Hong Kong money change services integrate online orders, how should store records and system logs be reconciled? The answer is to link each order, customer due diligence, quotation, payment receipt, exchange or remittance instructions, store delivery, reviewer, and exception handling with the same transaction number, and to reconcile the system, store cash or bank statements, and customer receipts daily.

25
June
Pakistan VASP Licenses: PVARA sets a September 5th registration deadline; 11 types of licenses under the Virtual Assets Act are now in effect.
Pakistan VASP Licenses: PVARA sets a September 5th registration deadline; 11 types of licenses under the Virtual Assets Act are now in effect.

Pakistan's PVARA has opened its licensing portal. Transitional entities already operating before March 5, 2026, must apply for a certificate of no objection by September 5, or they will have to cease operations. The Virtual Assets Act 2026 establishes 11 types of licenses, requiring locally registered companies, paid-up capital, suitability testing, and anti-money laundering systems. Offshore exchanges must establish local subsidiaries to renew their licenses.

25
June
South Korea's FIU (International Federation of Trade Unions) introduces new regulations for virtual asset transfers: personal wallets and overseas exchanges will be managed according to risk levels.
South Korea's FIU (International Federation of Trade Unions) introduces new regulations for virtual asset transfers: personal wallets and overseas exchanges will be managed according to risk levels.

South Korea's Financial Institutional Investor (FIU) has announced revised anti-money laundering regulations for virtual assets. High-risk transfers from personal wallets are restricted, while non-high-risk transfers are limited to the individual's own wallet. Overseas exchanges are categorized into low, medium, and high-risk levels for control. The Travel Rule has removed the 1 million won threshold, and VASP registration terms will take effect on August 20th. Requirements for personal wallets and overseas exchanges are expected to be implemented by 2026.

24
June
The U.S. OCC has conditionally approved World Liberty's national trust bank license, and the USD1 stablecoin is proposed to be subject to federal regulation.
The U.S. OCC has conditionally approved World Liberty's national trust bank license, and the USD1 stablecoin is proposed to be subject to federal regulation.

On August 14, 2026, the U.S. OCC issued conditional preliminary approval for a nationwide trust banking license to World Liberty Trust Company, proposing to set a price of USD1...

24
June
Pakistan's PVARA sets a September 5th deadline for crypto platform licenses: NOC application and a framework for 10 types of VASP licenses.
Pakistan's PVARA sets a September 5th deadline for crypto platform licenses: NOC application and a framework for 10 types of VASP licenses.

Pakistan's PVARA has launched an application process for encryption platform licenses. Existing operators must submit their Nomination of Authorization (NOC) applications by September 5, 2026, or face closure. Under Section 70 of the Virtual Assets Act 2026, the NOC is only a preliminary authorization and does not equate to a formal VASP license. The Act establishes 10 types of licenses; Binance and HTX obtained their NOCs in December 2025.

24
June
UK court liquidates Key Coin Assets: FCA warns of unauthorized crypto investment scams and advises investors on self-protection.
UK court liquidates Key Coin Assets: FCA warns of unauthorized crypto investment scams and advises investors on self-protection.

On August 11, 2026, the UK High Court ordered the liquidation of Key Coin Assets Ltd. The Insolvency Authority determined that it had no genuine cryptocurrency transactions and that funds were transferred to directors' personal accounts, exhibiting characteristics of a Ponzi scheme. Nine investors lost over £300,000. The FCA has listed it as an unauthorized entity since September 2024, advising investors to use Firm Checker to verify its registration status.

24
June
After the risk rating of a Hong Kong licensed company's client is upgraded, how should EDD, approval, and ongoing monitoring be re-integrated?
After the risk rating of a Hong Kong licensed company's client is upgraded, how should EDD, approval, and ongoing monitoring be re-integrated?

After a customer's risk rating is upgraded, simply changing the rating to "high risk" in the KYC system is insufficient. Licensed companies must immediately decide whether to suspend new high-risk transactions or withdrawal permissions, which EDDs (Earnings Disclosure Documents) need to be completed, who should review and approve them, and how to integrate the findings into subsequent transaction monitoring. Until these transitions are completed, existing lower-frequency monitoring and outdated approval processes should not be considered sufficient.

24
June
After the risk rating of a Hong Kong licensed company's client is upgraded, how should EDD, approval, and ongoing monitoring be re-integrated?
After the risk rating of a Hong Kong licensed company's client is upgraded, how should EDD, approval, and ongoing monitoring be re-integrated?

When a client's risk rating is upgraded, it's not enough to simply change the rating in the system. The correct approach is to link the triggering reason, supplementary due diligence, approval for whether to continue the relationship, transaction restrictions, and ongoing monitoring plans into a single record. First, identify why the risk increased, then decide what supplementary measures need to be taken, who should approve them, and what to focus on in the future. Before any conclusions are reached, impose restrictions on high-risk activities commensurate with the risk.

20
June
A Look Inside Vietnam's Crypto Asset Trading License Pilot Program: 10 Trillion Vietnamese Dong Paid-in Capital and Total Control of 5 Entities
A Look Inside Vietnam's Crypto Asset Trading License Pilot Program: 10 Trillion Vietnamese Dong Paid-in Capital and Total Control of 5 Entities

Vietnam is launching a five-year pilot program for a cryptocurrency trading market in accordance with Resolution 05/2025/NQ-CP, with the first batch of platforms expected to launch as early as the third quarter of 2026. The total number of licenses is capped at five, with a minimum paid-in registered capital of 10 trillion VND (approximately US$380 million). Institutional shareholders must hold at least 65% of the shares, foreign ownership is capped at 49%, and information systems must meet Level 4 standards.

19
June

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