Executive Director of the Hong Kong International New Economy Research Institute: "U-merchants" and ordinary investors should raise their legal awareness to ensure transaction compliance

Fu Rao, executive director of the Hong Kong International New Economy Research Institute, wrote an article entitled "Improving the Healthy Development of the Virtual Asset Supervision Industry", pointing out that the Supreme People's Court and the Supreme People's Procuratorate of China jointly issued an interpretation on several issues concerning the application of laws in handling criminal money laundering cases, which clearly listed "virtual asset" transactions as one of the money laundering methods, which will have the following impacts on the virtual asset industry: 1) Rising industry compliance costs. The introduction of regulations means that practitioners need to pay more attention to compliance issues and increase compliance investment to ensure that the business is legal and compliant. The market will usher in a reshuffle, and some non-compliant "U merchants" and project parties may exit the market, and the industry concentration will further increase. 2) Strengthen investor education. The introduction of regulations will prompt investors to pay more attention to the risks of virtual assets and improve investors' risk identification capabilities. 3) Gradually improve industry supervision. The release of this judicial interpretation will help regulatory authorities to more effectively supervise the virtual asset industry and promote the healthy development of the industry. As Hong Kong vigorously develops the virtual asset economy, the mainland will first respond to the serious crimes that virtual assets are most likely to cause. In this context, both "U merchants" and ordinary investors should raise their legal awareness, ensure transaction compliance, and avoid falling into legal risks. (Ta Kung Pao)