FinTech Global FS Regulatory Round-up - w/e 6 June 2025

ICYMI

• FSR Brief EP6: The Road to Crypto Regulation (UK)
• OJK assumes regulatory oversight of digital financial assets (Indonesia)

 

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Global

BIS report: Identifying financial crime patterns in real-time retail payment systems

The Bank for International Settlements (BIS) has published the findings of Project Hertha, which explored how transaction analytics could help identify financial crime patterns in real-time retail payment systems, while using the minimum set of data points. The Project found that payment system analytics could be a valuable supplementary tool to help banks and payment service providers (PSPs) spot suspicious activity. [5 Jun 2025]  #Payments

 

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UK

FCA leads international crackdown on illegal finfluencers

The FCA has announced that it has joined forces with regulators across the globe to protect social media users from illegal promotions by rogue financial influencers ('finfluencers').

Nine regulators, from Australia, Canada, Hong Kong, Italy, United Arab Emirates and the UK took part in a week of action, which began on 2 June 2025.

In the UK, the FCA has:

• made three arrests with the support of the City of London Police;
• authorised criminal proceedings against three individuals;
• invited four finfluencers for interview;
• sent seven 'cease and desist' letters; and
• issued 50 warning alerts.

The warning alerts will result in over 650 'take down' requests on social media platforms and more than 50 websites operated by unauthorised finfluencers. [6 Jun 2025] #Finfluencers #SocialMedia

FCA: Quarterly consultation No. 48 – lifting the ban on cETNs

The FCA has published its latest quarterly consultation – Consultation Paper 26/12 (CP25/16), which outlines proposed miscellaneous amendments to its Handbook. At chapter 4, the FCA sets out plans for  lifting the ban on the retail sale, marketing and distribution of cryptoasset exchange traded notes (cETNs) which are admitted to trading on a UK recognised investment exchange (RIE), and categorising these cETNs as Restricted Mass Market Investments (RMMIs). Responses to the proposal are requested by 7 July 2025.  [6 Jun 2025]  #crypto #cETNs

Law Commission consults on reforms to private international law – digital assets and electronic trade documents

The Law Commission has published a consultation on proposals to reform certain rules of private international law that apply in the context of digital assets and electronic trade documents. It also makes proposals in respect of section 72 of the Bills of Exchange Act 1882, which would apply to relevant documents in both paper and electronic forms.

The consultation focuses on wholly decentralised applications of distributed ledger technology (DLT), which the Commission has identified as posing very particular and novel challenges to the current rules of private international law. It therefore concludes that some law reform will be required if the private international law of England and Wales is to remain up to date and relevant in light of these technologies.

Responses to the consultation are requested by 8 September 2025. [5 Jun 2025] #DLT #Crypto

FCA and ICO leaders comment on how they are working together to support innovation

The FCA has published a blog, jointly authored by its CEO Nikhil Rathi and the Information Commissioner John Edwards, which discusses how the FCA and Information Commissioner's Office (ICO) are working together to support firms navigating data protection and financial regulation in a way that facilitates innovation. They highlight:

• how regulation can be a bridge rather than a barrier and cite the example of their joined-up regulatory positions when firms are using the FCA's AI Lab or the ICO's Regulatory Sandbox;
• efforts to listen to the sector, for example, hosting roundtables with industry leaders;
• supporting putting regulatory principles into practice – the ICO has already developed extensive guidance on AI and there are plans to develop a statutory code of practice for organisations developing or deploying AI and automated decision-making;
• work on providing clarity around liability and/or responsibility for AI, including generative AI and AI tools developed by third parties; and
• raising awareness of the tools and services available to support firms. [3 Jun 2025] #AI #Sandbox #Innovation

FCA: Advice from CBA Panel on draft CBA of 'Regulating Stablecoin Issuance and Cryptoasset Custody'

The FCA has published the advice from its Cost Benefit Analysis (CBA) Panel on the draft CBA of 'Regulating Stablecoin Issuance and Cryptoasset Custody'. The panel has provided high-level recommendations in relation to:

• Treatment of uncertainty – the panel recommends that the analysis would benefit significantly from including explicit sensitivity analysis under suitably broad ranges of assumptions for both: the growth of the markets accessed by UK consumers under the proposed and counterfactual (no regulation) scenarios; and the costs and benefits of particular regulatory options themselves.
• Assessment of costs and benefits – the panel recommends that the analysis would benefit from a more comprehensive assessment of the costs and benefits generated by the proposals.
• Options analysis – the panel recommends that the analysis would benefit from an explicit quantitative evaluation of the costs and benefits of introducing alternative sets of rules, in addition to the useful qualitative assessment of different regulatory approaches currently included. [30 May 2025] #Stablecoin #Crypto

 

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Australia

AUSTRAC has placed operating conditions on Australian crypto ATM providers

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has decided not to renew the registration of a crypto ATM operator and has imposed transaction limits and other operating conditions on other crypto ATM providers in Australia due to compliance concerns. The decision follows observations from an AUSTRAC taskforce that crypto ATMs are being used in fraudulent activities and scams, particularly affecting older Australians.

AUSTRAC is collaborating with law enforcement and ATM operators to implement measures aimed at reducing suspicious activity. New restrictions include an A$5,000 cap on cash transactions and enhanced customer due diligence requirements, as well as compulsory scam warnings and improved transaction monitoring systems

AUSTRAC aims to ensure that the crypto sector adheres to minimum standards to reduce the risk of exploitation, including educating potential victims about scam risks. [3 Jun 2025] #Crypto

 

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Hong Kong

Government gazettes two notices in relation to Stablecoins Ordinance

The Government has gazetted two notices relating to the Stablecoins Ordinance (SO):

• The date of commencement of the SO is 1 August 2025; and
• The notice explains that the prohibition on offering stablecoins or holding out as offering stablecoins under section 9(1) of the SO does not apply to offerings made to professional investors (within the meaning of section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap. 571)).  [6 Jun 2025] #Stablecoin

SFC joins global regulatory effort to curb activities of unauthorised finfluencers

The SFC is collaborating with regulators across the globe to tackle the activities of unlawful financial influencers (finfluencers) who promote financial products or services illegally on social media. This initiative, part of the 'Global Week of Action Against Unlawful Finfluencers,' involves using supervisory and enforcement powers to disrupt these illegal activities and educate investors about the risks associated with misleading content from finfluencers. The SFC's Chief Executive Officer, Ms Julia Leung, emphasised the importance of personal responsibility among investors, urging them to verify the regulatory status and trustworthiness of finfluencers and conduct thorough due diligence before making investment decisions.

The SFC is actively involved in several initiatives to combat unlawful activities by finfluencers and protect investors:

• On the supervisory front, the SFC commenced a thematic inspection in April 2025 to assess securities brokers' compliance with regulatory requirements when engaging finfluencers and digital platforms.
• Additionally, enforcement actions have included suspending licenses and prosecuting finfluencers for unlicensed activities. The SFC also engaged social media platforms to remove posts and profiles impersonating public figures and promoting unauthorised investment products, as well as commencing criminal prosecution against finfluencerS for unlicensed regulated activities (for example, see our previous update).
• In terms of investor education, the SFC has been actively warning the public about scams through its 'Don't be Sucker' anti-scam campaign, which includes various educational efforts to build awareness and resilience among investors.  [6 Jun 2025] #Finfluencers #SocialMedia

FSTB secretary discusses prospective developments to Hong Kong's VA markets

In a recent Legislative Council session, the Secretary for Financial Services and the Treasury, Mr Christopher Hui, highlighted a few prospective developments in the virtual asset (VA) space:

• First, the SFC is considering introducing VA derivatives trading for professional investors, accompanied by robust risk management measures to ensure orderly, transparent, and safe transactions. This initiative aims to enrich the product options available in Hong Kong's market.
• Secondly, in response to the latest developments in the VA market, Mr Hui noted that the Financial Services and the Treasury Bureau (FSTB) will issue a second policy statement on VA development, outlining future policy directions. This includes leveraging traditional financial services and innovative technologies to enhance the security and flexibility of real economy activities and encouraging both local and international companies to explore VA technologies.
• Finally, to attract more large-scale international fintech companies to establish presence in Hong Kong, the Office for Attracting Strategic Enterprises (OASES) offers one-stop services and special facilitation measures. The FSTB and OASES will also further enhance the preferential tax regimes for funds, single family offices and carried interest, including the inclusion of VAs as qualifying transactions eligible for tax concessions.  [4 Jun 2025] #VirtualAssets

SFC updates acceptable account opening approaches

The SFC has issued a circular to inform intermediaries of its updated acceptable non-face-to-face (NFTF) account opening approaches.

• Certification services (Existing acceptable approach #2 on the SFC’s designated webpage)

Certification services recognised by the Electronic Transactions Ordinance can be used for client NFTF identity verification. In addition to being employed remotely using smartphones with the near field communication capabilities, more convenient methods for remote onboarding of overseas investors are now available to intermediaries. For example, overseas investors with ePassports in compliance with the standards of the International Civil Aviation Organisation (ICAO) can subscribe to the Personal (Remote) ID-Cert Class 12 issued by Digi-Sign Certification Services Limited for remote onboarding.

Appendix A of the circular sets out the illustrative processes of using certification services to open accounts for overseas investors holding ICAO-compliant ePassports.

• iAM Smart (An acceptable approach newly included on the SFC’s designated webpage)

The SFC has introduced a new acceptable approach for client identity verification via the iAM Smart platform. The SFC now accepts iAM Smart for NFTF account opening, including both iAM Smart and iAM Smart+ versions. The iAM Smart Sandbox Programme has been launched to facilitate its adoption by financial institutions, encouraging intermediaries to join and explore the relevant resources.

Illustrative processes of the connection to and the adoption of iAM Smart for account opening are set out in Appendix B of the circular.

• Eligible jurisdictions in the remote onboarding of overseas individual clients (Existing acceptable approach #5 on the SFC’s designated webpage)

The SFC has updated the list of eligible jurisdictions for remote onboarding. The list now includes 15 additional jurisdictions including Argentina, Brazil, France, Germany, Greece, India, Indonesia, Japan, Korea, Luxembourg, Netherlands, New Zealand, Saudi Arabia, South Africa and Turkey. Intermediaries should be aware of domestic regulatory requirements and implement adequate cybersecurity controls to protect client data and accounts from emerging threats. The SFC will continue to monitor technology developments and communicate with the industry on reliable client identity verification methods.  [30 May 2025] #IdentityVerification

Government gazettes Stablecoins Ordinance

The government has gazetted the Stablecoins Ordinance, which seeks to establish a licensing regime for fiat-referenced stablecoins (FRS) issuers in Hong Kong. This follows the passage of the Stablecoins Bill by the Legislative Council on 21 May 2025 (see our previous update), which was tabled before the LegCo in December 2024 (see our previous update).

The Stablecoins Ordinance will come into operation on a day to be appointed by the Secretary for Financial Services and the Treasury by notice published in the Gazette.  Upon the Stablecoins Ordinance coming into operation, any person who, in the course of business, issues an FRS in Hong Kong, or issues an FRS that purports to maintain a stable value with reference to HKD in or outside Hong Kong, will need to obtain a licence from the HKMA.  [30 May 2025] #Stablecoin

HKMA and HKUST sign MoU to advance cybersecurity innovation for Hong Kong’s financial sector

The HKMA and the Hong Kong University of Science and Technology (HKUST) Business School have signed a memorandum of understanding (MoU) to enhance cybersecurity innovation and strengthen collaboration in applied cybersecurity research tailored to the specific needs of the financial industry in Hong Kong. The partnership will focus on developing practical applications, raising awareness of emerging threats, and fostering specialised talent to support the continuous development of the industry.

As part of the initiative, the HKMA and the HKUST Business School will explore innovative supervisory technology and regulatory technology solutions, leveraging cutting-edge technologies such as large language models. By engaging with financial institutions, the collaboration seeks to validate research outcomes and gain insights into evolving cybersecurity needs.

Ms Carmen Chu, the Executive Director (Banking Supervision) of the HKMA, emphasised the critical role of cybersecurity for the digitalisation of banking services and the importance of safeguarding Hong Kong's financial stability and integrity. Professor Hui Kai-Lung, Acting Dean of HKUST Business School, highlighted the forward-looking nature of this initiative and its potential to bolster the cybersecurity resilience of Hong Kong’s financial sector.  [29 May 2025] #Cyber

HKMA publishes consultation paper on proposed AML/CFT requirements for regulated stablecoin activities

The HKMA has published a consultation paper to seek views on the proposed anti-money laundering and countering the financing of terrorism (AML/CFT) regulatory requirements for regulated stablecoin activities. Market participants and other interested parties are invited to submit written comments by 30 June 2025.

This consultation paper was drafted pursuant to the Stablecoins Bill passed by the Legislative Council on 21 May 2025 (see our previous update), which aimed to establish a regulatory regime for supervision of activities involving stablecoins and providing the HKMA with relevant supervisory powers.

The consultation paper emphasises the need for stablecoin issuers to comply with AML/CFT controls due to the potential risks associated with stablecoin activities, such as anonymity and global reach, which can be attractive to illicit actors. For this, the consultation paper includes a host of proposed AML/CFT requirements. The key requirements include:

• General Requirements: Implement AML/CTF policies; ensure senior management oversight and staff training.
• Stablecoin Issuance: Conduct customer checks, including verifying wallet addresses; and monitor transactions involving unhosted wallets more closely.
• Stablecoin Redemption: Apply similar customer checks as for issuance; and verify ownership of wallets.
• Ongoing Monitoring: Use systems to detect and report suspicious transactions.
• Stablecoin Transfers: Follow special rules for virtual asset transfers to ensure compliance.
• Additional Measures: Monitor secondary markets to prevent illicit use of stablecoins.

The AML/CFT requirements for stablecoin issuers are set out in full in the draft guideline.

Additionally, the HKMA is developing additional AML/CFT guidelines for digital asset activities, such as offering stablecoins and providing custodial services. These guidelines will apply to authorised institutions and licensed persons involved in regulated stablecoin activities. The HKMA will reference guidelines from the SFC to ensure consistent regulation across financial institutions. The HKMA plans to consult with relevant financial sectors later in 2025 to finalise these guidelines.  [26 May 2025] #Stablecoin

HKMA consults on draft guideline on supervision of licensed stablecoin issuers

The HKMA has published the proposed draft guideline on supervision of licensed stablecoin issuers for consultation. The consultation closes on 30 June 2025.

The Stablecoins Bill was passed by the Legislative Council on 21 May 2025 (see our previous update). The draft guideline was prepared pursuant to section 171(4) of the Stablecoins Ordinance (SO) to set out guidance on the HKMA’s expectations with regard to the minimum criteria in Schedule 2 to the SO which a licensee is required to fulfil on an ongoing basis pursuant to section 24 of the SO.

The draft guideline covers various areas of supervision, including reserve assets management, issuance, redemption, distribution, business activities, financial resources, risk management, corporate governance, and business practices and conduct.

The guideline emphasises the importance of full backing of stablecoins with high-quality, liquid reserve assets, and mandates strict segregation and safekeeping of these assets to protect against claims by other creditors. It also sets out detailed requirements for the issuance and redemption processes to ensure transparency and fairness for stablecoin holders.

Additionally, the guideline addresses the need for robust risk management frameworks, including credit, liquidity, market, technology, operational, and reputation risks. It highlights the importance of corporate governance, requiring clear organisational structures, defined responsibilities, and effective internal control functions; as well as provisions for incident management, business continuity, and exit plans to ensure stability and resilience in the face of disruptions.  [26 May 2025] #Stablecoin

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Singapore

MAS clarifies regulatory regime for digital token service providers

The Monetary Authority of Singapore (MAS) has issued clarifications about the applicable scope for its Digital Token Service Providers (DTSPs) regime.

From 30 June 2025, DTSPs providing services solely to customers outside of Singapore relating to digital payment tokens and tokens of capital market products will need to be licensed.  MAS comments that it has set a high bar for licensing and will generally not issue a licence. The regulator notes that the money laundering risks are higher in such business models and if their substantive regulated activity is outside of Singapore, MAS is unable to effectively supervise such persons. Without a licence, such DTSPs will have to cease their regulated activities. 

Providers of services for digital payment tokens or tokens of capital market products that serve customers in Singapore are already subject to regulation and there is no change to what the licensed providers can do. Such providers which serve customers in Singapore may also provide services to customers outside of Singapore.

Providers of services in relation to other tokens, such as those only used as utility and governance tokens, are not subject to licensing or regulation under the new regime, and hence are not impacted.

Due to the higher risks presented by the specific circumstances set out above, existing DTSPs serving only customers outside of Singapore will be required to cease this activity when the regime comes into effect on 30 June 2025. MAS had reached out to persons who, based on information available to us, may be affected by the DTSP regime to clarify this policy position and to discuss their plans for an orderly wind-down of the activity.  [6 Jun 2025] #DTSPs

MAS blocks unregulated overseas online trading platforms

MAS has announced that the websites of two unregulated trading platforms are to be blocked with effect from 20 June 2025 as they have been identified as being in breach of the Securities and Futures Act 2001 (SFA).  [6 Jun 2025] #OnlineTrading

MAS response to feedback – Proposed DTSP Regime

MAS has published its response to feedback received on proposed regulatory approach, regulations and notices for DTSPs issued under the Financial Services and Markets Act 2022.  [30 May 2025] #DTSPs

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Malaysia

SCM alerts public to cloned Public Register scam

The Securities Commission Malaysia (SCM) has issued a warning to the public regarding a new investment scam, which involves a cloned version of the SCM’s Public Register of License Holders and Registered Persons. The scammers claim to represent entities purportedly licensed by the SCM and direct potential victims to a fraudulent website that mimics the official Public Register portal. Upon entering the name of the fake entity into the cloned site, the search result will show that the fake entity is legitimately licensed by the SCM. Victims are then persuaded to transfer funds into mule bank accounts allegedly for the purpose of investing. [5 Jun 2025] #Scams #Cloning

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India

SEBI issues warning in relation to fraudulent communications

The Securities and Exchange Board of India (SEBI) has issued a warning to the public regarding fraudulent communications that claim to be from SEBI officials, using the SEBI letter head, logo and seal. The perpetrators issue notices  through social media platforms, demanding payments for fines in order to prevent SEBI from taking enforcement action against the recipient.

SEBI urges the public to exercise caution and to verify the authenticity of any communications that purport to be from SEBI. [4 Jun 2025]  #SocialMedia #Fraud

 

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Thailand

SECT supports IOSCO’s initiative to promote collaboration in combating online investment scams

The Securities and Exchange Commission Thailand (SECT) has announced that it supports the International Organization of Securities Commissions’ (IOSCO's) request for online platform providers to collaborate with IOSCO member regulators in their operating jurisdictions to prevent and combat online investment scams.

The SECT highlights IOSCO's recent work in this area, including the launch of the International Securities and Commodities Alerts Network (I-SCAN), which is designed to collect data on behaviours indicative of investment fraud, unlicensed companies, and other suspicious activities reported by member countries. [4 Jun 2025] #Scams

 

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Vietnam

SBV announces Cashless Day 2025 events

The State Bank of Vietnam (SBV) has announced a number of events for its 'Cashless Day 2025', which focuses on promoting digital transformation and developing a digital economy. The SBV highlights ‘Ting Ting Day’, a cashless festival that will take place on 14-15 June 2025. [3 Jun 2025] #DigitalEconomy

 

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US

Acting Comptroller of the Currency discusses his regulatory agenda

The Office of the Comptroller of the Currrency (OCC) has published the remarks made by Acting Comptroller Rodney E. Hood's about his regulatory agenda at the U.S. Chamber of Commerce Capital Markets Summit.

In his remarks, Acting Comptroller Hood detailed the OCC's work to embrace bank-fintech partnerships, expand bank activities involving digital assets, promote financial inclusion and reduce regulatory burden to support a dynamic banking sector that will enable individuals, communities and the economy to thrive and grow. [3 Jun 2025] #DigitalAssets