Hong Kong Legislator Responds to Trust Company Involved in $500M Fraud Case: External Parties May Misunderstand Hong Kong's System

According to Sing Tao Headline, in response to a trust company's involvement in a $500M fraud case and the resulting questions about Hong Kong's system, Duncan Chiu, Chairman of the Legislative Council's Panel on Web3 and Virtual Asset Development, stated:

Hong Kong is actively attracting foreign investment, including from mainland China, but many foreigners have a limited understanding of Hong Kong's system, or even misunderstand it, which is a problem that needs to be addressed.

Chiu pointed out that the incident is expected to attract international attention, and relevant regulatory mechanisms must be reviewed as soon as possible to respond to public concerns. Currently, Hong Kong has not established a dedicated regulatory system for asset custody. Some Web3 companies use trust companies as a means of third-party asset custody. If operated according to formal procedures, there is no problem, but if criminals exploit loopholes in the system, it may affect external confidence in Hong Kong as a financial center. He suggested that publicity and education efforts should be increased, and that the system should be reviewed for optimization to prevent similar incidents from happening again.