HK bitcoin heist ignites intervention debate

Author: Brian Yap | Published: 23 Aug 2016

Hong Kong has been shaken by two incidents of cyber theft this year, but the territory’s regulators are struggling to address increased risks of virtual currency trading.

Hong Kong-based Bitfinex exchange, one of the world’s largest bitcoin trading platforms, was reported to have had $72 million worth of bitcoins stolen during the hack, making the incident the world’s second largest security breach after Mt Gox’s two years ago. 

But counsel in Hong Kong argue that it would prove to be counterproductive for regulators to rush to intervene in the trading of virtual currencies, as a strict environment could stifle their growth. "The real issue is that there is no easy answer about how virtual currency should be regulated, and that there is always the question of what regulations are actually appropriate for bitcoin," said  Mark Parsons, partner at Hogan Lovells in Hong Kong.