TechFlow news, April 3 — According to Hong Kong media ST Headline, regarding the recent $500 million cryptocurrency trust fraud case, Ng Kit-king, chairman of the Legislative Council's Web3 and Virtual Asset Development Panel, said: "Hong Kong is actively attracting foreign investment, including funds from mainland China. However, many international investors have only a superficial understanding of Hong Kong's system, and often harbor serious misconceptions. I believe this is an issue we must face directly. The FDT incident has had international repercussions, and the authorities must swiftly re-examine various regulatory frameworks to respond to public concerns. Since there is currently no custodial regulatory regime, Web3 companies often rely on trust companies to assist with third-party asset custody. There is nothing wrong with doing this properly, but unscrupulous individuals may exploit this gap for illegal activities. I am concerned this could weaken confidence in Hong Kong. I suggest the authorities enhance public education and examine whether there is room for improvement."
Financial sector legislator Chan Chun-ying pointed out that entrusting asset management to a trust company via corporate structures may create regulatory blind spots. He advised investors to carefully investigate company backgrounds and called for considering bringing "trusts" under legislative regulation.
