The bankruptcy of FTX is a new test of nerves for crypto regulators in Asia

CRYPTO’s latest existential crisis, courtesy of the Sam Bankman-Fried saga, erupted amid far-reaching planned changes to the digital asset rule books in Asian hubs including Hong Kong and Singapore.

The fall of the FTX exchange showed that the world lacked a true picture of its operations. As a result, officials in both jurisdictions and beyond are facing calls to ensure greater transparency, particularly with regard to clients’ assets.

Sissy Lu, founder of FinLink Partners, a digital asset advisory firm, said the immediate focus in Asia is “disclosure of leverage ratios, any conflicts of interest with users’ funds, and details of those funds and risk management.”

For now, Hong Kong and Singapore are still sticking to divergent regulatory paths. Hong Kong took a more welcoming stance two weeks ago, detailing plans to become a cryptocurrency hub with legal retail trading and dedicated exchange-traded funds. By contrast, Singapore is clamping down on retail cryptocurrency trading, focusing instead on productive applications of blockchain technology.

Hong Kong’s Finance Minister Paul Chan, in a blog post on Sunday, indirectly referred to FTX’s November 11 slide into bankruptcy, adding that the industry is “full of hope” for the city’s virtual asset market. He argued that this is because Hong Kong is on its way to a rulebook that provides the transparency, compliance and investor protection needed to counter the risks involved in the so-called crypto winter.

The Hong Kong Securities and Futures Commission said exposure of local entities authorized to FTX was “immaterial.”

Singapore argues that FTX’s troubles underscore the debtor-state’s focus on consumer safeguards such as a proposed ban on token purchases by mom-and-pop investors.

When asked at a conference about whether FTX imbroglio is changing the Singapore Monetary Authority’s approach to cryptocurrencies, Chief Financial Technology Officer (CFO) Sopnendu Mohanty said on Wednesday that “we’re staying the course, staying on the business case-study approach in the space.”

He added that the central bank was “ready to innovate” if risks were brought under control. The Monetary Authority is also currently reviewing the license application for’s local subsidiary, Quoine Pte. In the wake of recent developments. Bloomberg News

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