Leveraging more than twenty years of experience serving clients in the financial sector, our firm is well positioned to guide clients on the legal and regulatory issues arising from distributed ledger technologies ("DLT") with financial applications and in financial technology ("FinTech").
Our lawyers advise a wide range of clients, from start-ups to Fortune Global 1000 companies, including banks, insurance companies, asset managers, brokers and dealers, securities and derivatives trading platforms and clearing systems, cryptocurrency exchanges, crypto wallet operators, electronic payment system operators, DLT platforms, FinTech operations and technology business incubators.
Our clients have included 2 of the world's top 5 biggest cryptocurrency exchanges, one of the world's largest electronic payment services operators and the operator of one of the world's largest electronic trading and clearing platforms.
The nature of DLT and Fintech themselves raise a wide range of novel legal and regulatory uncertainties. Currently, there are few or no judicial or market precedents to guide the application of existing laws and regulations to the new methods of doing business. By leveraging our broad and deep understanding of financial legal and regulatory issues and technology and our extensive experience working with financial market infrastructure players, we provide sophisticated and pragmatic advice to clients navigating the increasingly complicated landscape at the intersection of technology, law and regulation.
WHAT WE CAN DO FOR YOU
Armed with deep insights into both DLT and FinTech and the financial services industry, Timothy Loh LLP is ready to assist with the following:
Virtual Asset Service Providers (VASPs)
We advise virtual asset service providers ("VASPs") on licensing requirements under the Anti-Money Laundering Ordinance ("AMLO") and the Securities and Futures Ordinance ("SFO"). We provide guidance on the full range of conduct of business requirements administered by the Securities and Futures Commission ("SFC").
We leverage our deep experience in financial services regulations and in dealing with the SFC on the interpretation and application of applicable regulations.
We advise on terms and conditions of service and on terms and conditions for specific product offerings. We have extensive experience advising in respect of staking products and a broad range of crypto derivative products including futures type contracts and products based on call and put options and options strategies. Our experience extends to the legal issues related to these products as well as their classification under the SFO as "securities", "futures contracts", "collective investment schemes" and "structured products".
Stablecoin Issuers
We have represented clients on the structuring of stablecoins including in respect of the custody and exchange of the underlying asset, the minting and burning of the coins and the trading of the coins.
Our experience extends to advising on legal issues, including the preferred legal structure of the coin, whether under a trust or contractual arrangement and whether secured or unsecured, as well as the full range of regulatory issues administered by the Securities and Futures Commission ("SFC") which arise under the Securities and Futures Ordinance ("SFO") and other legislation.
We are active in monitoring and guiding clients on the new legislative requirements for stablecoins proposed by the Hong Kong Monetary Authority ("HKMA").
Electronic Payment Service Operators
We represent clients providing electronic payment services, including traditional providers of money remittance services as well as operators of platforms offering crypto to fiat and fiat to crypto exchange services.
We advise on money service operator ("MSO") licensing requirements under the Anti-Money Laundering Ordinance ("AMLO") and on related customer due diligence ("CDD") and economic sanctions compliance requirements. We advise on terms and conditions of service.
We are following developments relating to proposed new regulations of spot crypto trading services to be administered by the Customs and Excise Authority.
Digital Asset Wallet Operators
We advise on the legal nature of digital asset wallet operations, including the nature of the digital asset and the different structural options for custody, including trust, contractual delivery and re-delivery and bailment.
Where trust structures are adopted, we advise on trust and corporate service provider ("TCSP") licensing under the Anti-Money Laundering Ordinance ("AMLO") and on related customer due diligence ("CDD") and economic sanctions compliance policies and procedures.
Leveraging our understanding of the underlying DLT technology and custody operations in traditional finance, we provide sophisticated and pragmatic advice on terms and conditions of service.
Token Issuance
We advise token issuers as well as cryptoexchange operators on the legal characterization of tokens including their classification under the Securities and Futures Ordinance ("SFO").
We guide token issuers on the possible application of investment product offering regulations, including prospectus offering and exemption requirements.
We help token issuers identify laws applicable to their tokens and guide them on token structuring including algorithm pre-requisites to meet legal and business needs.
Decentralized Autonomous Organizations (DAOs)
We advise on legal issues related to the establishment and operation of decentralized autonomous organizations.
We provide guidance on legal structures to hold assets and to employ personnel and on evolving governance requirements and duties owed by DAO operators to token holders.
Regulatory Enforcement Action
We have extensive experience in assisting DLT & FinTech clients to respond to regulatory enquiries, investigations and enforcement action.
Our experience extends to enquiries and investigations by the Securities and Futures Commission ("SFC") in respect of allegations or concerns that digital assets may be characterized as "securities", "futures contracts", "collective investment schemes" or "structured products" or that services offered may constitue "regulated activities", "stock exchanges", "futures exchanges", "automated trading services" or "virtual asset services".
We have represented clients in enquiries by the Hong Kong Monetary Authority ("HKMA") in respect of whether digital asset services may relate to "money" or "deposit taking" activities.
We guide clients in responding to concerns as to failures in anti-money laundering ("AML/CTF") related customer due diligence ("CDD") policies and procedures.
Client Disputes
We have extensive experience in representing clients in disputes involving DLT and fintech businesses.
Our experience extends to allegations of security and security incident response failures in connection with the loss of digital assets. We have in-depth working knowledge of challenges to jurisdiction clauses and arbitration clauses and to the legal classification of digital assets to determine the nature of duties implied by law
We have a high level of familiarity with network security technology and a deep understanding of the technical operation of DLT.
grounded regulatory
COMPLIANCE
Regulatory Framework
Our DLT & Fintech practice stands as a market leader in Hong Kong financial services regulation.
From asset manager investing in virtual assets to electronic trading platform operators offering markets for virtual assets and their derivatives, we provide comprehensive compliance support throughout. Drawing from our extensive experience in financial regulatory matters, fintech trends and our knowledge of financial market infrastructure.
We are well positioned to help your firm comply with statutory requirements and applicable regulations , including those administered by the Securities and Futures Commission (“SFC”) and the Hong Kong Monetary Authority (“HKMA”):
Securities and Futures Ordinance (“SFO”)
Banking Ordinance (“BO”)
Payment Systems and Stored Value Facilities Ordinance (“PSSVFO”)
Anti-Money Laundering and Counter-Terrorist Financing Ordinance (“AMLO”)
Personal Data (Privacy) Ordinance (“PDPO”)
creative financial
SOLUTIONS
Investment Agreements
Our corporate and regulatory lawyers evaluate the legal characterization of DLT & FinTech offerings and based on that characterization, identify applicable laws and craft creative solutions to meet business requirements, to minimize legal risk and to ensure compliance with applicable regulatory requirements.
Our strategies blend compliance with functionality to allow you to reach new heights in DLT and FinTech.
pragmatic
DISPUTE RESOLUTION
Regulatory Protection
We have extensive experience in assisting DLT & FinTech clients to respond to regulatory enquiries, investigations and enforcement action.
Let us arrange an appointment with our award-winning lawyers for your case
Contact UsHOW WE OPERATE
Our pursuit of excellence anchors the firm’s sophisticated approach.
We blend steadfast professionalism with our relentless dedication, enabling us to provide exceptional legal services.
Our practices are encapsulated within these domains:
Compliance
Compliance
Compliance is key to your operation. With our deep background in financial services, we help you understand and take practical steps to adhere to applicable laws and regulations including the SFO, BO, PSSVFO, AMLO, UNSO, and the PDPO.
Risk Management
Risk Management
Protecting your interests is our priority. We provide insightful guidance on managing legal risks arising from the nature of the technology. We have a particular expertise with electronic payment systems and electronic platforms for the trading of virtual assets.
In DLT & Fintech, our practice has been recognised by:
“Leading Practice”
“Leading Practice”
“Leading Practice”