16/11/22

HONG KONG: Financial Secretary Calls for Stronger Supervision on Crypto.

As published on thecoinrepublic.com, Tuesday 15 November, 2022.

Recent collapse of the Bahamian crypto exchange FTX as it went on to file for bankruptcy has started creating ripple effects. FTX bankruptcy-like instances deepen the skepticism towards the whole crypto market. Needless to say that financial regulators and authorities across the countries have kept a close watch on the crypto industry.

The Financial Secretary of Hong Kong indicated a sharper focus when it comes to crypto assets around proper supervision and transparency. This all came in the wake of the abrupt collapse of FTX which was apparent to come by anytime soon.

Paul Chan, Hong Kong’s Financial Secretary, called it crucial to be steady and cautious while promoting crypto asset industry’s development within the region.

Chan has posted along with a poster which translated as in order to play an active role while adopting the innovation, there is a need for a set of regulations with adaptability and potential to keep up with the pace along with the running times. This would be beneficial in managing the risks properly, creating prerequisites focusing on market development in a vigorous and orderly manner.

A Chinese reporter said the post from Paul Chan could be taken as a manifesto that would be welcoming crypto companies all across the world. The Financial Secretary said that keeping account of FTX’ bankruptcy, there is a need to strengthen transparency and proper supervision over crypto.

Chan further also talked about the relevance of managing the risks properly and maintaining safety while dealing with crypto. Along with making full use of innovative technologies like crypto and blockchain, it also becomes crucial to stay cautious to maintain a safeguard. Consistent fluctuations and involved potential risks in the crypto could be fatal and they should be kept out of the traditional finance and economy.

The Hong Kong government went on to issue a policy in October month called the Policy Declaration on the Development of Virtual Assets in Hong Kong. The policy was about introducing the regulatory framework along with the regulatory direction based on the risk involved.

In addition to this, the government also proposed a number of test projects initiatives focusing on to test and further enhance the technologies involved in powering the crypto assets.

Meanwhile, CEO of FTX, Sam Bankman Fried was reported to plan to move away from the United States jurisdiction along with his two associates, in order to dodge the potential prosecution. The preference was said to be Dubai but it might not be easy or rather appropriate given the relations between both the nations. Treaties between the US and Dubai would allow US authorities to detain them and send them back to the country.