Hong Kong to avoid FTX-like scenario through transparency and supervision
Just days after Binance CEO Changpeng “CZ” Zhao warned about the onset of greater regulatory scrutiny amid the FTX collapse, the Financial Secretary of Hong Kong called for a stronger focus on transparency and proper supervision when dealing with virtual assets.
Financial Secretary Paul Chan highlighted the importance of being “steady and cautious” when promoting the development of the virtual asset industry in Hong Kong. A poster accompanying Chan’s post, roughly translated to:
In October, the Hong Kong government issued a policy — Policy Declaration on the Development of Virtual Assets in Hong Kong — introducing a regulatory framework and risk-based regulatory direction. In addition, the government proposed several pilot initiatives to test and enhance the technologies powering virtual assets.
According to Chinese reporter Colin Wu, Chan’s post can be seen as a manifesto to welcome cryptocurrency companies around the world. In her words,
Chan didn’t take offense at FTX’s collapse. Instead, he highlighted the importance of maintaining safety and properly managing risks, explaining that:
In addition, his advice for crypto companies was to maintain separate accounts for keeping client assets. As pointed out by Wu, Chan also recommended crypto businesses set aside actual operating expenses for at least 12 months, among other requirements.
On an end note, Chan reiterated that a stable and sustainable crypto industry would become a reality with transparent operations and proper and appropriate supervision.
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