With FTX's collapse, it looks like Hong Kong has dodged a bullet thanks to its conservative regulatory system that made it hard for such firms to operate.
Some investors, who missed the chance to invest in FTX, saw a silver lining in the conservative approach of Hong Kong. In a way, it helped them avoid the crypto platform that collapsed.
(Photo : Illustration by Leon Neal/Getty Images)
In this photo illustration the FTX logo and mobile app adverts are displayed on screens on November 10, 2022 in London, England. The Bahamas-based crypto exchange's larger rival, Binance, walked away from a potential bailout deal, as FTX struggles with a wave of customer withdrawals that have created a liquidity crunch.
FTX Collapse: Hong Kong Appears to Have Dodged a Bullet
As per the latest report by the South China Morning Post, the giant crypto platform used to operate in Hong Kong before leaving in favor of the Bahamas.
But even after leaving the Asian territory, the Hong Kong news outlet says that the staff of both FTX and Alameda Research still operated in the Fragrant Harbour. And as such, they were traveling back and forth from the Bahamas to their former home.
The South China Morning Post reports that several days before the drastic collapse of FTX, its big boss Sam Bankman - Fried was still a prominent figure in Hong Kong.
In a teleconferencing video, the FTX boss spoke to an audience in the Asian territory. He explained to them "how new technologies are supporting financial inclusion."
The South China Morning Post reports that some of his audience were folks from the financial regulators of Hong Kong. Bankman-Fried expounded on how disruptive the new tech is.
Ten days after that, the crypto platform fell to pieces. And given that, some investors are saying that they have been saved by the conservative system of Hong Kong.
The Chief Executive Officer of Saxo Markets for Hong Kong, Richard Douglas, shared his viewpoints on what transpired.
He says that "the FTX debacle points to exactly why Hong Kong regulators need to bring virtual assets trading back in a well-regulated market for investors."
Douglas went on to note that "The Securities and Futures Ordinance is a well-structured regulatory framework, [with] very detailed and specific guidelines around how client money and client securities should be treated, which all licensed entities have to adhere to, and is designed to prevent exactly this type of situation."
Read Also: FTX Crypto Exchange Bankrupted! CEO Bankman-Fried Resigns; Should Consumers Worry About It?
Hong Kong's Cautious Approach to Crypto and Other Digital Assets
Meanwhile, according to a recent report by Coin Geek, Hong Kong assures investors that it is maintaining a cautious approach to cryptocurrencies and other similar digital assets. It comes as one of the largest crypto exchanges, FTX, has collapsed.
It is worth noting that FTX filed for bankruptcy last November.
Wu Blockchain disclosed in a tweet that the Financial Secretary of the Asian nation says that "transparency and proper supervision must be strengthened."
The Financial Secretary of Hong Kong said that because of the bankruptcy of FTX, transparency and proper supervision must be strengthened. Hong Kong just made a manifesto to welcome cryptocurrency companies around the world. https://t.co/w9nFTAQhuN
— Wu Blockchain (@WuBlockchain) November 13, 2022
Related Article: Former FTX CEO Denies Speculations Fleeing to South America After Resignation
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Written by Teejay Boris
