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Unleashing the Potential of Web3 and Virtual Assets: Keith Choy’s Keynote Speech at the Hong Kong Web3 Carnival 2023

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According to reports, at the 2023 Hong Kong Web3 Carnival, Keith Choy, interim head of the Intermediary Department of the Hong Kong Securities and Futures Commission, stated in his

Unleashing the Potential of Web3 and Virtual Assets: Keith Choys Keynote Speech at the Hong Kong Web3 Carnival 2023

According to reports, at the 2023 Hong Kong Web3 Carnival, Keith Choy, interim head of the Intermediary Department of the Hong Kong Securities and Futures Commission, stated in his keynote speech that he would unleash the potential of Web3 and virtual assets. DeFi has concerns about financial stability, data, and investor protection, mainly due to concerns about leverage and borrowing. Starting from June this year, whether the virtual asset trading platform (VATP) provides securities tokens or non securities tokens, we will have to issue licenses to protect investors. According to our existing system for VATP, we still need to conduct relevant consultations, make some adjustments and supplements, and suggest setting additional admission rules for retail investors. We call on all relevant parties in the market to actively participate in discussions and engage in constructive dialogue with us.

Interim Director of the Intermediary Department of the Hong Kong Securities Regulatory Commission: Will unleash the potential of Web3 and virtual assets

The Intermediary Department of the Hong Kong Securities and Futures Commission (SFC) has set its sights on unleashing the potential of Web3 and virtual assets. This declaration came from Keith Choy, interim head of the department, in his keynote speech at the 2023 Hong Kong Web3 Carnival. According to Choy, one of the ways to do so is by addressing concerns over financial stability, data, and investor protection – particularly those surrounding DeFi, leverage, and borrowing. This article aims to delve deeper into Keith Choy’s speech and its implications for the virtual asset trading platform (VATP).

The Current State of the Virtual Asset Trading Platform (VATP)

As it stands, the VATP requires licenses for both securities and non-securities tokens to ensure investor protection. However, the rule only took effect this June, and some consultations, adjustments, and supplements need to be made. Specifically, additional admission rules for retail investors must be introduced. All relevant parties in the market are also urged to engage in constructive dialogue with the SFC.

Debunking Concerns over Financial Stability, Data, and Investor Protection

DeFi, or decentralized finance, is an essential component of Web3, and it has become increasingly popular. However, it has also garnered criticisms for concerns over financial stability, data, and investor protection, especially relating to leverage and borrowing.
In his speech, Choy reassured the public that the SFC would scrutinize DeFi carefully but not underestimate its potential, as it can offer new possibilities for market development. The government’s priority will be preventing systemic risks, such as those related to AML/CFT, and ensuring investor protection. However, the SFC will also seek to promote innovation and support the growth of the virtual asset market.

Path Forward: Unleashing the Potential of Web3 and Virtual Assets

The Hong Kong SAR government has already committed resources to support the development of FinTech and innovative financial services. Full utilization of these technological advancements is a key aspect of Hong Kong’s ambition to remain a leading international financial center. The government recognizes that new opportunities bring new challenges, such as the need for enhanced supervision and regulation.
In line with this objective, the SFC will continue to provide a regulatory framework that supports innovation and investor protection in equal measure. The current VATP rule would be subject to further modification as necessary, and additional admission rules for retail investors would be introduced. This will ensure that relevant parties in the market can benefit from new innovations in a regulated manner.

FAQs

1. What is the Hong Kong Securities and Futures Commission (SFC)?
The SFC is a statutory body responsible for regulating the securities and futures markets in Hong Kong. Its regulatory objectives include promoting market confidence and investor protection, among other things.
2. What is decentralized finance (DeFi)?
DeFi refers to financial systems built on public blockchains, such as Ethereum, that allow anyone to access financial services without the need for intermediaries like banks.
3. How can I engage in constructive dialogue with the SFC regarding the virtual asset trading platform (VATP)?
You can contact the SFC directly through their website or attend relevant consultations and meetings to provide feedback and express your views on the issue.

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