Hong Kong urged to grab chance after world-first financial disclosure order in blockchain case

Authorities urged to introduce legal framework to boost investors’ confidence and turn Hong Kong into a global Web3 hub

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Courts in Hong Kong and other jurisdictions have had little experience in dealing with disputes related to cryptocurrency trading, the judge said. Photo: Sam Tsang

Published: 7:33pm, 19 Aug 2024Updated: 12:23am, 20 Aug 2024

Hong Kong should grab the chance to regulate the operations of blockchain-based entities after a world-first ruling by the city’s High Court ordering a HK$6 billion project to disclose its financial records, a lawmaker and a legal expert have said.

Legislator Johnny Ng Kit-Chong on Monday said the government should capitalise on the opportunity offered by the court case and introduce a legal framework for running a DAO, or “decentralised autonomous organisation”, to boost investors’ confidence and turn Hong Kong into a global Web3 hub.

A DAO is an entity in which all members participate in decision-making through voting mechanisms on a blockchain.

“I hope the government can improve the ecology of Web3 and regulate DAOs legally so that more people in the industry will come to Hong Kong to develop their projects and bring in capital and talent,” Ng said.

“It can be an important part of pursuing economic growth.”

The government in 2022 proposed a range of measures to develop the virtual assets industry to promote the city as an international cryptocurrency hub. Last year it introduced a new licensing regime for virtual asset providers.