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Josnmd
@virtualvortex
A lawyer once observed on the streets of Hong Kong that OTC (over-the-counter) exchange shops are everywhere, from Wan Chai to Causeway Bay to Tsim Sha Tsui, with many stores discreetly offering instant cash exchange services for Bitcoin and USDT, without banks and without asking about the origin. However, this crypto physical exchange ecosystem is facing a major turning point. The Hong Kong Financial Services and the Treasury Bureau (Financial Bureau) and the Securities and Futures Commission (SFC) jointly launched a public consultation on 6/27, intending to establish a licensing system for digital asset (virtual asset) trading and custody services, clearly stating that USDT-to-fiat exchange services provided through physical stores or platforms must be included in the SFC's licensing and registration system. According to estimates, Hong Kong currently has over 200 physical OTC stores and more than 250 online OTC service providers, with many brands like CryptoHK, One Satoshi, and HKD.com forming semi-financial service models. Many stores are equipped with professional counters, real-time exchange rate screens, and even support multiple languages, facilitating cash exchange for users from various countries. However, these exchange shops are mostly unregulated under the current Securities and Futures Ordinance or Anti-Money Laundering Ordinance, forming a gray area for fund circulation. Their high anonymity and cash transaction characteristics have long been viewed as a breeding ground for potential money laundering, capital flight, and even fraud fund "whitewashing".
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