In the Financial Secretary’s 2020 – 2021 budget speech, the Hong Kong government announced that it will consider extending the anti-money laundering/counter-terrorist financing requirements to cover cryptocurrency service providers. Cryptocurrencies are currently classified as virtual assets in the city and are regulated by the Securities and Futures Commission.
By including cryptocurrencies under AML regulations, the government would attempt to curb the use of platforms such as bitcoin in money laundering. This is an issue that has arisen for many global regulators, as by their nature crypto assets are often designed to obscure the identity of the user, as well as to hide the purpose of the transaction, making them extremely attractive to those with nefarious purposes. However, they also hold many attractive benefits to users including transactional security, low transfer costs and decentralisation, meaning that many regulators are facing an environment where they are already widely used. By bringing service providers into the existing AML regime Hong Kong is hoping to address some of these ongoing issues.
At last year’s ICLR Annual Conference in The Hague, ICLR member came together to present on the implications of AI on legal regulators and how they might harness this technology to their advantage. Panelists drew from input from ICLR members and how their own institutions were engaging with Artificial Intelligence, as shown in the infographic below:
The presentation cover various aspects, including:
What is Artificial Intelligence? … And what it isn’t: Steve Wilson, Standpoint Decision Support
What are the Potential Risks to be Managed: Bridget Gramme, Center for Public Interest Law at the University of San Diego School of Law
How Legal Regulators can use AI: Crispin Passmore, Solicitors Regulation Authority
Getting into Artificial Intelligence: Alison Hook, Hook Tangaza
Interested in the impact of new technologies on regulation? Get involved at this year’s annual conference. Contact Jim McKay (firstname.lastname@example.org) to become involved as a speaker or session moderator.
Stable coins, the rise of custodial solutions and the recent announcement of Fidelity launching an institutional platform for Bitcoin and Ethereum are all designed to make it easier for institutional investors to partake in the cryptocurrency market.
Yet a number of questions arise as the cryptocurrency ecosystem continues to expand its reach to traditional financial markets. Trust must be built among new market participants, countries leading innovation need to respond to legal concerns and actions should to be taken to pave the way for both accredited and non-accredited investors to step foot into the cryptocurrency market.
As a result, lawyers specializing in cryptocurrency related matters have become key players for ensuring the success of the global adoption of digital assets. Three women lawyers in particular are taking action to help define legal uncertainties currently facing the evolving crypto ecosystem.