Regulation and Innovation – Where Does the Balance Lie for Crypto?
Regulation and Innovation – Where Does the Balance Lie for Crypto?
15 February 2023
The bankruptcy filing of FTX, the world’s second largest crypto exchange, was a point of inflection for governments, regulators and even the industry itself. Could regulation have forestalled the failure of FTX, protected investors from significant losses and prevented heavy damage to confidence in the industry? Across the world, there is yet a general consensus on how crypto activities and players should be regulated. In the United States, the debate has not moved beyond the question of who should regulate. Most jurisdictions have chosen to use their anti-money laundering regime (AML), which does not deal with conduct and investor protection issues, to regulate crypto platforms. Hong Kong has taken a bolder path. By summer this year, it will be mandatory for all centralized virtual asset platforms that offer virtual asset services in Hong Kong, whether or not the assets traded are securities, to be licensed by the Securities and Futures Commission (SFC) under its “fit and proper” regime, with the objective of ensuring investor protection.
Many governments have made known their desire for their market to be a hub for Web3, and the center for technological leadership. Yet, without a clearly defined regulatory approach, it would be difficult to continue to foster innovation while protecting consumers and investors. Inevitably, regulation comes at a cost. When properly calibrated, the benefit it yields should justify the cost. In the fast-evolving virtual asset universe, where does the balance lie?
Join Alexa Lam and her moderator Jay Luo for a discussion of how an appropriate regulatory model could be created and what it might look like.
Speaker:
Alexa Lam is currently a Fellow in the Department of Law of The University of Hong Kong and a Consultant with Raymond Siu & Lawyers. Prior to this, Ms. Lam was Professor of Legal Practice at The University of Hong Kong. Before she took up law teaching, Ms. Lam spent 16 years at the Securities and Futures Commission where she was most recently Deputy Chief Executive Officer and Executive Director of Investment Products. Among Ms. Lam’s responsibilities was the function of developing policies for market innovation and new investment products, and market access with Mainland China.
Moderator:
Jay Luo is President of Dymon Asia Capital, a multi-billion alternative asset manager. Prior to joining Dymon in 2012, Mr. Luo was Head of Asia Pacific for S.A.C. Capital Advisors where he built the group’s Asia presence in Hong Kong, Singapore, Tokyo, and Shanghai. Mr. Luo’s 20 years hedge fund experience included areas of risk management, regulatory compliance, and portfolio management. Mr. Luo has observed the crypto industry since 2018, and has recently co-founded IN Capital, an investment platform with a focus on accelerating web3 companies.
Enquiries: Flora Leung at aiiflhku@hku.hk