Davis Polk partner and Asia practice chair Martin Rogers discussed tech-based crime in Asia’s emerging digital markets and the need for robust anti-money laundering (AML) regulations with Asian Legal Business.

When asked about cryptocurrency-related financial crime, Martin said, “The way forward domestically for the crypto industry should be to embrace regulation and licensing and then impose balanced AML requirements. Hong Kong is a good model for this, with its Virtual Asset Service Provider regulatory framework including KYC [know your customer]/AML requirements as a core element. It’s worth emphasizing, though, that the AML requirements need to be tailored to account for the nature of the global cryptocurrency markets.”

“Domestic laws should cover not just AML and CTF [counter-terrorism financing] but also cybersecurity. This is an area where Hong Kong is still in the process of catching up, currently lacking sufficient cybercrime offences (and as yet any legislation to protect critical information infrastructure, although this is in the works),” Martin added. 

The article also notes that the attitude towards corruption is a key element of financial crime in Asian markets.

“Corruption is often at the heart of financial crime. In the majority of cases involving financial crime, corruption plays a crucial, if sometimes small, part. Corruption is still a major issue in Asia, with low-level corruption in particular still not really seen as criminal in nature,” Martin explained. “Domestic anti-corruption laws should be strongly enforced with appropriate investment in strong anti-corruption agencies, with more whistleblowing.”

Martin also highlighted that “fast-accelerating technological developments in areas such as cyberhacking, AI and data manipulation present potentially an overwhelming challenge.”

“White-collar crime: The money war,” Asian Legal Business (June 26, 2024)

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