As a seasoned investor and resident of Hong Kong, I find myself at the crossroads of traditional finance and the burgeoning world of Web3. Having witnessed the city’s rollercoaster ride with cryptocurrencies, I am both encouraged and concerned by the latest developments regarding DAOs and their potential legal framework.
Hong Kong Legislative Council member and a well-known Web 3.0 advocate, Johnny Ng, has recently called for the Hong Kong government to explore regulations governing decentralized autonomous organizations (DAOs). This push for a legal framework follows a court ruling that ordered defendants involved in a DAO project to disclose financial records.
In dispute is the matter of Mantra DAO, where the accusers claim that the defendants have improperly used resources that rightfully belong to the DAO. On the other hand, the defendants assert that the ownership of these assets actually rests with the token owners.
As a cryptocurrency investor, I’ve found myself pondering about the regulatory uncertainty surrounding Decentralized Autonomous Organizations (DAOs). Unlike traditional organizations that have a centralized leadership, DAOs function independently without a single controlling entity. Instead, they rely on smart contracts to govern their operations, which has raised questions and concerns in my mind about how these entities will be regulated in the future.
In an interview with local media on Monday, Ng emphasized the importance of establishing a definite legal structure for Decentralized Autonomous Organizations (DAOs) to pave the way for the city to emerge as a leading global hub in Web3. He believes that the Mantra DAO case could serve as a significant legal precedent within the Web3 sector, with the court’s verdict potentially shaping future judgments on comparable matters.
As a researcher, I’ve noticed a significant dip in the market capitalization of Mantra DAO. Currently, it stands at approximately $740 million, a considerable drop from the $1.1 billion mark seen in late July, as reported by DefiLlama.
Hong Kong and Crypto
Hong Kong’s history with cryptocurrency has had its highs and lows. After losing its title as a leading crypto hub due to Mainland China’s prohibition on cryptocurrency trading in 2021, Hong Kong has recently expressed a willingness to reconnect with the digital asset sector, inviting crypto companies to set up operations within its borders for the year 2022.
By June 2023, the government will set up a regulatory system for cryptocurrency trading platforms, enabling authorized platforms to provide retail trading opportunities within the area. Yet, even with the city’s encouraging approach towards digital currencies, crypto businesses are facing challenges in obtaining banking services.
As a passionate advocate for transforming Hong Kong into a thriving cryptocurrency center, I, Ng, have recently advocated that the government should alleviate current banking limitations facing crypto companies. Furthermore, I propose a forward-thinking approach: either establishing a specialized “virtual asset/digital asset bank” or modernizing our existing banks to effectively manage virtual assets.
In the recent past, I’ve voiced my approval for the potential integration of Bitcoin within Hong Kong’s financial reserves, a significant sum amounting to approximately $417.1 billion, as of May 2024.
Just recently, Hong Kong gave the green light to Bitcoin and Ethereum exchange-traded funds (ETFs). Yet, these investment vehicles haven’t shown significant growth as of yet, with approximately 4,200 Bitcoin units and 14,560 Ethereum units in their possession, based on information from SoSoValue.
Strengthening Hong Kong’s role as a pioneer in cryptocurrencies might benefit significantly from the establishment of clear regulations specifically designed for Decentralized Autonomous Organizations (DAOs). This could pave the way for a more secure and orderly growth in this sector.
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2024-08-20 14:16