thecoinrise.com
Atom Asset Exchange (AAX), a cryptocurrency exchange based in Hong Kong that launched only four years ago, has temporarily stopped processing withdrawals in the middle of the last month.
Its management has gone silent, and the extent of the company’s losses is now unknown.
AAX’s claim that “no funds have been compromised” is unlikely to reassure investors given the exchange’s effective closure. Many local investors could have exposure to AAX, but it is unclear if they will be harmed by the backlash.
Although the FTX debacle was a setback, Financial Secretary Paul Chan Mo-po still believes virtual assets and cryptocurrencies are “unstoppable”. Consequently, the city is striving to catch up to Singapore in terms of financial sector innovations.
If the government is serious about embracing “virtual assets,” as Chan said, he added that we need precise definitions to tell apart the digitized forms of securities already subject to regulation, such as stocks, bonds, ETFs, and mutual funds, from the innovative blockchain-based instruments, such as non-fungible tokens (NFTs), bitcoin, and other digital tokens that have yet to be subjected to any form of oversight.
There needs to be effective regulation because of the threats they pose to financial stability, consumer protection, money laundering, and terrorist financing.
In other words, as Chan has phrased it, “same business, same risk, same rules” is the way to go. Industry insiders can no longer argue they are immune to government oversight or that policymakers “don’t get it” in light of the current situation.
FTX’s Bankruptcy Sets an Example for Hong Kong
It’s worth noting that FTX, previously valued at $32 billion, has received funding from several prestigious investors like SoftBank, Sequoia, Tiger Global, Insight Partners, and Paradigm.
Temasek Holdings, another FTX stakeholder, disclosed having $275 millions in holdings. Meanwhile, Vice President of Seychelles-based AAX exchange Ben Caselin has stepped down from his role in the exchange recently.