FTX CEO on tokenized stocks; South Korean police officers want crypto | The Daily Forkast

Transcript

Welcome to The Daily Forkast, May 11th, 2021. I’m Angie Lau. Let’s get you up to speed. From Asia to the world.

A Forkast exclusive as nearly everyone continues to seek out new opportunities in the crypto space, one firm with roots in Asia has taken the lead in capturing investors’ imaginations. Now two-year-old Hong Kong-operated FTX reports a 25x year-over-year increase from April of last year.

FTX is one of the industry’s leading derivatives exchanges most well known for pioneering in creative financial instruments like tokenizing stocks, including Coinbase’s public listing, pre-IPO. Investors got to make bets in Coinbase before it even went public.

But ingenuity has also raised regulatory concerns. So how does FTX think about this? We spoke with FTX founder and CEO Sam Bankman-Fried on the firm’s two-year anniversary. FTX’s secret to navigating through some regulatory obstacles, licenses.

“Right now, you can’t actually withdraw any of the tokens, any of stocks as tokens from FTX. So it is really more like a traditional brokerage offering, but that might change and I think it is something we and others are looking into, what it would take to get to the point where these could become actually free-floating tokens on the blockchain. That will require some more regulatory legwork. The core pieced answered is that, yeah, there’s license for this. And I think our philosophy is always get a license when there is one.”

Others in the industry are watching closely as well. HashKey Group chief operating officer and risk manager Angelina Kwan, who also spent close to a decade working for Hong Kong Securities and Futures Commission says, regulators are likely to provide more guidance on tokenized products such as stocks.

“So I believe tokenized stocks will actually follow in the same respect in terms of requirements to documentation. Regulators have already been looking at this area. It’s nothing new to them. Shouldn’t be any surprise, but they’ll probably issue more guidance in this area as the market develops.”

Around the markets now, Bitcoin down almost 5% and in the top ten for cryptocurrencies, the opposite of yesterday. We’re seeing all top ten in red. Doge is today’s biggest loser, down nearly 13.5%.

Meanwhile, South Korean police aren’t taking getting policed on crypto well, as officers from the South Korean police are struggling to make sense of a new rule banning them from crypto trading, some are now speaking out.

One officer telling local media outlet, Incheon-ilbo that criminalization and punishment of personal crypto trades is like communist state control. Another questions how police are supposed to investigate illicit cryptocurrency transactions if they’re not even allowed to own it and understand the inner workings.

And by the way, more rules for crypto exchanges in South Korea as well. If you want to do business as an exchange, there’s legislation on the table that will expand what crypto exchanges are legally liable for, including providing cybersecurity for investors to prevent hacks and anti-money laundering. For what was once a very dynamic crypto-embracing country, we’re starting to see legislation clampdown.

And finally this, as many governments like South Korea grapple with crypto concerns and how to protect their citizens. Sometimes legislating is not the only way.

The chairman of the Monetary Authority of Singapore or MAS was asked in Parliament: How is the government thinking about protecting retail investors when it comes to crypto? His answer? The country’s best defense is an informed public. Makes sense to me.

And that’s the Daily Forkast from our vantage point right here in Asia. For more, visit Forkast.News. I’m Angie Lau. Until the next time.