In July, The Tokenizer published The Security Token RegRadar Report produced in collaboration with the government of Liechtenstein. As part of the report, we did a series of qualitative interviews with leading legal experts from the selected countries.
This interview with Padraig Walsh, Partner, Tanner De Witt, provides insight into Hong Kong’s regulatory development history with regard to security tokens. Also, the interview explores to what extent Hong Kong has an accommodating and friendly attitude towards the new industry of security tokens.
Could you please start by telling about the development within the token economy and the security token industry in Hong Kong?
Padraig Walsh (PW): It started for me probably around six years ago, give or take, which would have been relatively early days in Hong Kong.
And anywhere, I guess…
PW: Yes, anywhere, but I think Hong Kong was at the vanguard, largely because of the dynamics here. That was at a time where we had an inquiry about a particular business involved in cryptocurrency trading that wanted to make trading available to retail. There wasn’t any framework under which they could be licensed at the time. So the advice we gave was that there was no license in Hong Kong that was necessary for them. But they were quite ambitious, and they said, “Whether we need it or not, is there a license we could apply for?”. So that was a general indication of the Hong Kong market at the time. This was a business that wanted to be regulated and wanted to try to do the right thing. However, over the next two to three years, the vast preponderance of inquiries that we fielded were very much on the other side of that extreme, with businesses focussing on how to avoid being regulated. That probably gives you an insight into where Hong Kong was.
Hong Kong is a highly regulated financial services centre, and cryptocurrency businesses have faith in the stability of the system here. For a start, it’s got a very…
