The JPEX incident is unlikely to affect Hong Kong's vision for the development of Crypto Assets.

Recently, the collapse of a cryptocurrency trading platform in Hong Kong has attracted industry attention. Although this incident has caused a certain impact on the Hong Kong crypto assets industry, in the long run, it may actually help promote the healthy development of the industry.

Hong Kong has been committed to becoming a global Crypto Assets hub. The government has made unremitting efforts to create a favorable ecosystem for Crypto Assets, aligning with its broader vision of maintaining international financial competitiveness. However, recent incidents of cryptocurrency exchange platform closures have cast a shadow over this rapidly growing industry.

In mid-September, a trading platform suddenly increased its withdrawal fees significantly, effectively limiting users' ability to withdraw funds. This incident affected thousands of users, with estimated financial losses exceeding 1 billion HKD. In addition to triggering a police investigation, it also severely damaged public confidence in Crypto Assets.

This scandal undoubtedly casts a shadow over the development of Crypto Assets in Hong Kong and may raise public doubts about other Web3 initiatives by the government. Some institutional investors even commented: "Hong Kong already has horse racing, why do we need Web3?"

However, from another perspective, by addressing the regulatory challenges exposed by this incident, Hong Kong has the opportunity to strengthen the protection of retail investors. This once again highlights the necessity of implementing a licensing system for virtual asset trading platforms.

Considering the current volatility of the Crypto Assets market, security risks, and technical barriers, it may be difficult for retail investors to see significant growth in the short term. However, we are witnessing encouraging signs of institutional adoption of digital assets and blockchain technology.

The institutional sector has recognized that Crypto Assets are not only a speculative tool but also a revolutionary future financial infrastructure. In particular, the Hong Kong government is promoting the tokenization of physical assets.

Securities regulators are developing more detailed guidelines to regulate the tokenization of authorized investment products. The Financial Management Authority is also expanding its first global tokenized green bond pilot project and outlining possible next steps to promote the tokenization of the Hong Kong bond market.

Mainstream companies are also gradually adopting blockchain technology. For example, a Southeast Asian "super app" with 180 million users recently launched a Web3 wallet for its Singapore users, promoting the use of stablecoins in actual payments.

Despite the challenges that lie ahead for the widespread adoption of digital assets, the progress made by institutional forces in bridging traditional finance and Crypto Assets finance is worth noting. To meet the stringent demands of institutions for stability, security, and customization, Crypto Assets infrastructure companies are developing advanced custody and wallet solutions, such as multi-party computation (MPC) wallets and smart contract wallets.

During the last speculative bubble, the digital asset market was mainly driven by the rapid wealth accumulation desires of retail investors. However, we are now at a critical moment where the crypto assets industry must prove its ability to have a real impact on the实体经济. This is similar to the reasons many institutions are quickly joining the artificial intelligence revolution—because AI can significantly enhance productivity.

Although recent events have posed challenges to the development of Crypto Assets in Hong Kong, they also indicate that the industry is maturing and is no longer limited to speculation. Currently, significant progress has been made in areas such as stablecoins, payments, and the tokenization of real assets. The rapid adoption by institutions is expected to bring a more stable and revolutionary digital economy to Hong Kong and the entire Asia.