Following is a question by the Hon Dennis Leung and a written reply by the Acting Secretary for Financial Services and the Treasury, Mr Joseph Chan, in the Legislative Council today (September 25):
 
     It has been reported that quite a number of disputes and complaints involving cross-boundary remittance services have arisen in recent years, and the public has much concern about the security of cross-boundary remittances to the Mainland. Regarding enhancing regulation of cross-boundary remittance services, will the Government inform this Council:

(1) from 2019 to July 2025, of the respective numbers of (i) premises for operating cash note exchange and (ii) premises for operating cryptocurrency trading in Hong Kong that obtained a Money Service Operator (MSO) licence and operated remittance services (set out in Table 1);

Table 1
 

Year	(i)	(ii)
2019
……
2025(January to July)

(2) from 2019 to July 2025, of the number of complaints or requests for assistance received by the Hong Kong Customs and Excise Department (C&ED) concerning remittances from Hong Kong to the Mainland, as well as the amounts involved in such cases, with a breakdown by nature of cases (set out in Table 2);

Table 2
 

Nature of cases	Complaints or requests for assistance received by C&ED
	2019		……		2025(January to July)
	Number	Amount involved	Number	Amount involved	Number	Amount involved
……
……
Total

(3) Regarding cases where problems arise during cross-boundary remittance process, whether the authorities will consider classifying the relevant remittance institutions (such as money changers) as failing to meet the "fit and proper person" criteria for a MSO licence, based on non-compliances confirmed by the government authorities of the remittance destination (e.g. using non-compliant third-party transfers during the remittance process, the remittance being classified as all or part of the funds for money laundering or terrorist financing, etc.); if not, of the reasons for that; and

(4) as it is learnt that some money changers require customers to sign "transaction notes" containing additional disclaimers and terms before providing cross-boundary remittance services, thereby exempting themselves from liability should problems arise from such remittances, whether the authorities will consider further regulating money changers holding an MSO licence to prevent them from evading the liability through certain exemption clauses; if so, of the details; if not, the reasons for that?

Reply:

President,

     The Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) establishes a licensing regime for money service operators. The Customs and Excise Department (C&ED) is the law enforcement agency responsible for administering this licensing system and regulating currency exchange and remittance services.

     Having consulted the C&ED, the reply to the four parts of the question is as follows:

(1) The number of particular premises operated by licensed money service operators during the period from 2019 to July 2025 is as follows:
 

Year (as at year-end)	Total number of particular premises
2019	2 017
2020	1 330
2021	1 142
2022	994
2023	902
2024	842
2025 (as at end-July)	817

     Regarding the regulation of cryptocurrency trading services, the Financial Services and the Treasury Bureau (FSTB) and the Securities and Futures Commission (SFC) conducted a public consultation from June to August 2025 on the legislative proposals for regulating digital asset trading service providers. The FSTB and the SFC are formulating details of the licensing regimes based on the feedback received, with a target of submitting a bill to the Legislative Council in 2026.

(2) As regards the complaints and assistance requests received by the C&ED concerning remittances from Hong Kong to the Mainland, they mainly involve cases where funds remitted through money service operators to Mainland bank accounts were frozen. Between 2019 and 2022, the C&ED did not receive such reports or requests for assistance. From 2023 to the first two quarters of 2025, the C&ED received a total of 1 046 assistance requests involving frozen remittances to Mainland bank accounts through money service operators, involving 98 money service operators and an amount of approximately Renminbi (RMB) 63 million in total.

     Regarding the aforementioned cases involving frozen remittances to Mainland bank accounts through money service operators, the annual breakdown is tabulated below:

 

	2023	2024	2025 (as at end-June)
Number of assistance requests	161	710	175
Number of money service operators involved (Note)	43	78	40
Amount involved (RMB million)	approx. 10.69	approx. 44.10	approx. 8.59

Note: Some money service operators were involved in more than one assistance request.

     The C&ED has contacted all affected individuals and has actively followed up with the relevant licensed money service operators to facilitate communication and negotiations between the parties involved. With the C&ED's intervention, the situation of frozen remittances in 359 cases has been resolved so far, involving a total amount of approximately RMB 19 million. In addition, the C&ED will enhance collaboration with relevant Mainland authorities to assist the affected individuals.

(3) When applying for or renewing a licence, money service operators must comply with the "fit and proper" requirements under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) and the relevant guidelines. They are also required to submit a business plan to the C&ED, detailing the operational model and rationale, clearly disclosing the fund flow and delivery channels, and demonstrating that effective and appropriate anti-money laundering and counter-terrorist financing measures (including a mechanism for monitoring daily operation) are in place. Through these licensing requirements, the C&ED can effectively assess and monitor the risks associated with money service operators of varying business models and scales.

     When the C&ED assesses the "fitness and properness" of a money service operator, whether the money service operator is involved in non-compliance is one of the important factors of consideration. If non-compliance is identified (e.g. transactions conducted via delivery channels unapproved by C&ED or involving illicit funds), the C&ED will, based on facts and evidence, take decisive enforcement actions, including administrative sanctions (e.g. licence revocation or refusal of licence renewal) and/or criminal prosecution.

(4) The C&ED attaches great importance to the compliance of money service operators in providing currency exchange and remittance services, and has implemented ongoing supervisory measures. These include, among others, requiring licence applicants and licensees to clearly outline in their business plans and transaction records respectively the fund delivery channels and the safeguards (e.g. compensation mechanisms) that will be provided to customers in the event of problems arising from cross-boundary remittances.  This ensures that customer funds are handled and transactions are completed in a proper manner, safeguarding the interest of the public and customers. Before granting a money service operator licence, the C&ED conducts a comprehensive assessment of the applicant's competence, integrity, and ability to operate fairly, so as to ensure that their business models do not harm or potentially harm the interest of the public and customers.

     The C&ED will continue to closely monitor market developments and review the regulatory requirements for the money service industry as appropriate.

Ends/Thursday, September 25, 2025
Issued at HKT 14:00

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