Paul Chan, the Financial Secretary of Hong Kong, has highlighted the importance of being “steady and cautious” when promoting the development of the virtual asset industry in Hong Kong.
It has been reported that just days after Binance CEO Changpeng Zhao (CZ) warned about the onset of greater regulatory scrutiny amid the FTX collapse, Chan called for a stronger focus on transparency and proper supervision when dealing with virtual assets.
A poster accompanying Chan’s post, roughly translated to:
“While actively embracing innovation, there must be a regulatory package that adapts and keeps pace with the times to properly manage risks, create prerequisites for the orderly and vigorous development of the market.”
However, 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.
The report said that 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.
“The Financial Secretary of Hong Kong said that because of the bankruptcy of FTX, transparency and proper supervision must be strengthened.”
“We must not only make full use of the potential brought by innovative technologies, but also be careful to guard against fluctuations and potential risks that may be caused by them, and avoid these risks and impacts from being transmitted to the real economy.”
Thus, 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.