The billionaire founder of crypto exchange FTX, Sam Bankman-Fried, criticized regulations in Hong Kong and elsewhere that limit crypto investment access to wealthy investors during a webinar at the city’s FinTech Week 2022 on Monday.
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Fast facts
- Wealth-based suitability tests are “deeply classist and deeply racist,” said Bankman-Fried , asserting that the policy allows the rich to get richer while discriminating against otherwise qualified investors.
- Hong Kong introduced a licensing regime for crypto platforms in 2018, proposing they only service individuals with a portfolio of at least US$ 1 million in liquid assets. The licensing program will reportedly become mandatory next March.
- Instead of wealth-based qualifications for digital assets, Bankman-Fried believes investors could be issued knowledge-based tests to determine their readiness for risky investments.
- “We want to make sure that people know what they are accessing, that they know the risks, and can make reasonable judgment calls, so implementing a knowledge-based system to determine access is more effective than a wealth-based system,” he said.
- Digital assets are well designed for equitable access, and the crypto space should be used to ramp up broader financial access, he added.
- The idea behind crypto was to be accessible, inclusive, and democratized, according to Marcello Mari, chief executive officer at decentralized portfolio management protocol SingularityDAO. “Unfortunately, right now we still have too many barriers to access,” he told Forkast News in a recent interview.
See related article: The crypto industry needs to do more to help ordinary investors