On Sunday, Hong Kong’s Financial Secretary shared a blog post clarifying how Hong Kong is still bullish on digital assets with proper provisions after the FTX failure. They informed that significant regulations and legislations are the first requirements for the sound development of the crypto ecosystem. At present, many crypto community members questioned their hope in the crypto space, however, Hong Kong’s efforts and encouraging approach have brought the morale of many up.

Financial Secretary Paul Chan suggested how being “steady and cautious” is significant when promoting the development of the virtual asset industry in Hong Kong. A poster accompanying Chan’s post, translated version says, “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.”

Chan seems unconcerned about FTX’s collapse and the havoc it has brought to the crypto space. However, he stressed the need to preserve safety and risk management, saying that

“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.”

A Chinese reporter Colin Wu commented on Chan’s post saying that his post can be seen as a manifesto to welcome cryptocurrency companies around the world. She said, “The Financial Secretary of Hong Kong said that because of the bankruptcy of FTX, transparency and proper supervision must be strengthened.”

Additionally, he advised crypto firms to create separate accounts in order to keep their assets safe. The reporter also pointed out the recommendation shared by Chan to keep aside actual operating expenses for at least 12 months, among other requirements.

He highlighted the importance of openness and proper supervision when dealing with virtual assets and regulations will “create the prerequisites for an orderly and robust market.”This development took place after Changpeng Zhao, Binance CEO cautioned everyone of the increased scrutiny after the collapse of FTX.

Hong Kong’s Financial Secretary Paul Chan said, “The bursting of the Internet bubble in 2000 made many people wary of technological development, but the technology still follows its path, developing the platform economy and a network economy in a mobile terminal and the network environment.” 

He added, despite the ongoing crisis in the crypto ecosystem, Hong Kong will continue to welcome the launch of virtual asset exchange-traded funds (ETFs) and that its Securities and Futures Commission will initiate a project on the public consultation on protection requirements for retail investors.

At the end of October, the SAR government issued the “Policy Declaration on the Development of Virtual Assets in Hong Kong”, and shared the guidelines and vision to facilitate innovation in the crypto ecosystem, and the development of the virtual asset industry applications and technologies.