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Hong Kong regulator warns banks over Bitcoin-related customer AML risk

Jan 13 2014 Trond Vagen, Compliance Complete

The Hong Kong Monetary Authority (HKMA) has warned banks in the territory to pay extra attention to customers who deal in or operate schemes related to virtual currencies such as Bitcoin. The HKMA said the anonymity offered by some virtual currencies could pose a money laundering risk for banks, whose accounts may be used for activities relating to such currencies. Under the HKMA's Guideline on Anti-Money Laundering and Counter-Terrorist Financing, banks are required to assess the extent to which their services are vulnerable to money laundering or terrorist financing risks, the regulator said in a circular to the industry. "This issue is especially relevant where emerging technological developments may facilitate anonymity," the regulator said. "Virtual commodities that are transacted or held on the basis of anonymity fall into this category and pose significantly higher inherent ML/TF risks, including risks associated with potential or existing customers that may use banks’ accounts

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