New York should learn from Hong Kong in terms of cryptocurrency regulation.
Dr. Omer Ozden wrote in a recent CoinDesk article titled "New York Should Learn from Hong Kong in Cryptocurrency Regulation" that unelected individuals in Washington, D.C. are exercising shocking authoritarian power as regulators, which contradicts New York's claim to transition from an outdated financial system to a digital economy.
---The following content is sourced from CoinDesk, written by Omer Ozden, RockTree Capital
Driven by the recent regulatory crackdown in Washington, D.C., companies in the Web 3.0 field are fleeing New York. As the regulatory authorities refuse the city's leadership's wishes, the global relevance of New York is diminishing compared to other major financial centers - but mainland China and Hong Kong have proven otherwise.
Over the past 100+ days, China and the U.S. have taken different paths in cryptocurrency regulation. After 18 months of policy ambiguity, the former seems to have made a shift, swiftly implementing common-sense cryptocurrency regulations in Hong Kong to foster innovation and encourage industry development.
Omer Ozden is the Chairman of RockTree Capital, an investment fund in the Web 3.0 space, and previously practiced securities law in New York and Silicon Valley.
New York City Mayor Eric Adams embraced Web 3.0 from the start, engaging in activities supporting cryptocurrency and even accepting salaries paid in Bitcoin initially. The elected official actively promotes the benefits of Web 3.0 and has formulated a blueprint for New York's economic recovery, but the bureaucrats in Washington disagree.
Currently, unelected individuals in Washington, D.C. are exercising shockingly authoritarian power as regulators, which contradicts New York's claim to transition from an outdated financial system to a digital economy.
The Great Transformation in Hong Kong, China
On April 11, Carrie Lam, the Chief Executive of the Hong Kong Special Administrative Region, attended the inauguration ceremony of the Web 3.0 Association Hong Kong and delivered a speech.
Carrie Lam stated that innovative technology is a key development area in Hong Kong, and we must persist in driving economic growth through technological innovation.
The development of Web 3.0 is currently at a crucial point, and this disruptive technology has the potential to change many existing business models and create new opportunities. In the face of the development trend of Web 3.0, we must dare to become leaders in this wave of innovation.
He believes that Web 3.0 plays a key role in the development of financial technology. At the end of last year, the government issued a policy declaration on virtual assets, indicating an open attitude and firm determination. The government will establish appropriate regulation for the market and implement a new licensing system for virtual asset service providers starting in June, ensuring the stable and orderly development of the market.
This new framework, implemented on June 1st, provides clarity for broker-dealers, investors, and cryptocurrency exchanges, while also ensuring the full consideration of retail investors' participation. It also serves as a testing ground for future regulation and innovative development in other Web 3.0 industries in China, accelerating the overall recovery of Hong Kong.
Big Apple turns sour
New York benefited from the warning signs in Hong Kong. Now, with regulatory agencies in the United States taking restrictive measures similar to those adopted by China two years ago, the Web 3 industry that Adams seeks to support, including venture capital funds and projects, has already left Silicon Valley and other parts of the United States. What is most worrisome is that due to the current environment in the United States, even Coinbase, which supports regulation, is considering leaving the country. The Web 3.0 industry is sensitive!
As part of Hong Kong's embrace of cryptocurrency measures, Hong Kong regulatory agencies have established stablecoin issuance guidelines, and a stablecoin based on the Hong Kong dollar is clearly brewing.
In March of this year, US regulatory agencies forced Signature Bank to close, despite its solvency. Former Congressman and board member Barney Frank publicly stated that the US authorities closed the bank for political reasons in order to send a strong anti-cryptocurrency message. Meanwhile, as the US Securities and Exchange Commission prosecutes cryptocurrency exchanges in the United States, Hong Kong has been in contact with them and has been lobbying for them to establish business in Hong Kong.
Based on my experience as an investor in Web 2.0 and Web 3.0, as well as decades of experience as a US securities attorney at a large international law firm in New York and China, I believe that legislators quickly enacting lenient and sensible laws, just as engineers rapidly develop intelligent code, is essential for promoting innovation and growth.
The issue to consider when formulating appropriate laws is: how can we promote innovation and economic growth? This is a question that Adams has been asking, as well as Li Jiachao. Unfortunately, the U.S. Securities and Exchange Commission has defined the most important regulatory issue in the United States as - what is a security?
Federal legislators and New Yorkers may suffer the same consequences of this cautionary tale unless they embrace blockchain. This month, representatives in Congress introduced the "SEC Stabilization Act" to thoroughly reform the U.S. Securities and Exchange Commission and remove Chairman Gary Gensler due to a series of abuses of power. If this unelected chairman unilaterally leads the country in a direction contrary to the desires of the most populous city and tens of millions of American cryptocurrency users, then Adams and his constituents should learn from this experience and take action now, like the people of Hong Kong, because New Yorkers are rapidly losing their two favorite things - money and freedom.
