02 Feb 2014 / South China Morning Post – Hong Kong’s latest bitcoin exchange is set to become the city’s best funded even amid questions about the identities of its backers.
A refusal by those running Hong Kong Crypto Exchange to name the local people who have invested US$2 million in the business has reignited concerns about criminal use of the digital currency.
The city’s third bitcoin exchange cited non-disclosure agreements for its refusal to reveal its owners’ identities.
“It is no secret nowadays there are several large exchanges in the world. However, all of them experience difficulties working with fiat currencies,” said the company’s chairman and CEO, Pheng Cheah. “Our exchange won’t have these shortcomings.”
After the arrest last week of bitcoin promoter Charlie Shrem, charged by US prosecutors with conspiracy to launder money, the Customs and Excise Department warned currency-transfer businesses to ensure they had proper safeguards in place to prevent money laundering and terrorism financing.
“You should assess the extent to which your services are vulnerable to ML/TF [money laundering and terrorism finance] abuse,” it said in a circular released by the Money Service Supervision Bureau. “This issue is especially relevant where emerging technological developments may facilitate anonymity.”
“Anonymity of the investors may not be conducive to building trust,” said Charles Mok, lawmaker representing the information technology sector. “But then again, even who initiated bitcoin itself is a secret, so how much does it further matter that the investors of an exchange is anonymous? It may or may not matter much. Those who want to play will continue to play. Those who don’t trust it to begin with will not.”….. Read more
