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So, Hong Kong Has Now, Officially, Issued Its Very Own Regulatory Standards. For Tokenized Financial Products, Issued Within The City... 🚀🚀 The initiative aims to foster innovation and ensure robust consumer protection within the field of tokenization. The HKMA's, comprehensive regulatory standards issued on February 20th, cover the sale and distribution of tokenized financial products by authorized institutions. It aims to foster innovation while ensuring robust consumer protection within the field of tokenization, where RWA's, are digitally represented using DLT or similar systems. The guidelines delineate the scope of tokenized products that fall under this new regulatory framework, explicitly excluding products already covered by the SFO and specific regulations by the SFC and HKMA. It's a response to the rapid advancement in tokenization tech and it's application in the financial sector. Hong Kong has become increasingly open towards Web3 tech in recent months, and is now focused on implementing comprehensive rules for the sector. #ExistingRulesToApply... 📌📌 The regulatory notice establishes clear principles that existing rules and protections for TradFi products should similarly apply to tokenized products. Given their comparable terms, features, and risks. Including structured investment products and tokenized precious metals not regulated by the SFO, they did explicitly state the new rules do not cover stablecoins. To ensure authorized institutions adhere to these standards, the HKMA mandates thorough due diligence before offering tokenized products to customers. Including understanding the product’s nature, features, risks, and continuous due diligence to adapt to change. Institutions must also perform due diligence on issuers and third-party service providers involved in the tokenization process, assessing their experience, track record, as well, the risks associated with such arrangements. #DisclosuresAndRiskManagement... 🚨🚨 Re product and risk disclosure, institutions must act in the best interests of their clients, fully disclosing key terms, features, and risks associated with tokenized products. Including risks associated with the underlying DLT networks, potential security threats like, hacking, legal uncertainties regarding ownership and finality of transactions on DLT networks. Risk management is a key area outlined by HKMA. Authorized institutions must establish adequate policies, procedures, systems, and controls to identify and mitigate risks related to the sale and distribution of tokenized products. Including risk management framework covering policies, internal controls, complaint handling, compliance, internal audit, and business continuity planning. Institutions providing custody services for tokenized products must comply with the HKMA’s expected standards for digital asset custody, ensuring services are secure as well reliable. #HONGKONGandCHINAsTOKENIZEDREGULATORYstrategy... 🇭🇰🇨🇳 #LFGrowASIA... 💥💥

So, Hong Kong Has Now, Officially, Issued Its Very Own Regulatory Standards. For Tokenized Financial Products, Issued Within The City... 🚀🚀 The initiative aims to foster innovation and ensure robust consumer protection within the field of tokenization. The HKMA's, comprehensive regulatory standards issued on February 20th, cover the sale and distribution of tokenized financial products by authorized institutions. It aims to foster innovation while ensuring robust consumer protection within the field of tokenization, where RWA's, are digitally represented using DLT or similar systems. The guidelines delineate the scope of tokenized products that fall under this new regulatory framework, explicitly excluding products already covered by the SFO and specific regulations by the SFC and HKMA. It's a response to the rapid advancement in tokenization tech and it's application in the financial sector. Hong Kong has become increasingly open towards Web3 tech in recent months, and is now focused on implementing comprehensive rules for the sector. #ExistingRulesToApply... 📌📌 The regulatory notice establishes clear principles that existing rules and protections for TradFi products should similarly apply to tokenized products. Given their comparable terms, features, and risks. Including structured investment products and tokenized precious metals not regulated by the SFO, they did explicitly state the new rules do not cover stablecoins. To ensure authorized institutions adhere to these standards, the HKMA mandates thorough due diligence before offering tokenized products to customers. Including understanding the product’s nature, features, risks, and continuous due diligence to adapt to change. Institutions must also perform due diligence on issuers and third-party service providers involved in the tokenization process, assessing their experience, track record, as well, the risks associated with such arrangements. #DisclosuresAndRiskManagement... 🚨🚨 Re product and risk disclosure, institutions must act in the best interests of their clients, fully disclosing key terms, features, and risks associated with tokenized products. Including risks associated with the underlying DLT networks, potential security threats like, hacking, legal uncertainties regarding ownership and finality of transactions on DLT networks. Risk management is a key area outlined by HKMA. Authorized institutions must establish adequate policies, procedures, systems, and controls to identify and mitigate risks related to the sale and distribution of tokenized products. Including risk management framework covering policies, internal controls, complaint handling, compliance, internal audit, and business continuity planning. Institutions providing custody services for tokenized products must comply with the HKMA’s expected standards for digital asset custody, ensuring services are secure as well reliable. #HONGKONGandCHINAsTOKENIZEDREGULATORYstrategy... 🇭🇰🇨🇳 #LFGrowASIA... 💥💥

🔍 Navigating the Risks and Rewards of Liquid Restaking At Re7 Labs, we are committed to staying at the forefront of DeFi innovation and risk management. As liquid restaking protocols gain momentum, it’s essential to understand the associated risks and rewards. Restaking has grown fast, attracting in excess of $20bn of capital in a short period of time. With that in mind, we developed a Restaking Risk Framework, which we are excited to publish together with P2P.org. 💡 In the report we explore: 1/ The Basics & The Opportunity: Understand what staking is and the potential opportunities liquid restaking presents. 2/ Risk Management Frameworks: Learn about our comprehensive approach to managing the inherent risks in liquid restaking. 3/ Participation in LRT markets: How to access the opportunities within restaking. Discover how to navigate this evolving landscape and make informed decisions. 👉 Read the full article: https://lnkd.in/egs7542f 👉 Check out our co-publisher: P2P.org #DigitalAssets #DeFi #Restaking

In a continuous effort to enable our clients to stay ahead of the curve and successfully navigate the complex financial risk landscape, Moody's partnered with Elliptic – a leader in digital asset risk management. Our companies have created a unified platform that integrates on- and off-chain data, allowing customers to conduct both traditional and digital asset risk screens. This way, institutions will get a comprehensive overview of each virtual asset service provider (#VASP) they’re doing business with, enabling them to accurately evaluate the risk and adjust their approach accordingly. Learn more about what this means for handling digital compliance below.

Risk management identifies, assesses, and controls potential risks that could negatively impact an organization. Investors and traders can use AI to see how risky it is to invest in different cryptocurrencies. They can use this information to decide which cryptocurrencies to invest in and adjust their investment plans. For example, Coinbase, the biggest US cryptocurrency exchange, is trying out ChatGPT to help with risk analysis of coins or tokens before allowing them to be traded. Regular people could soon use AI programs like ChatGPT to determine whether a coin or token is risky based on their age, how much money they have invested, their investment goals, and other factors. AI tools like ChatGPT can help traders and investors choose cryptocurrencies by looking at their prices and risks. Also, AI can study blockchain information like transactions, user data, and contract specifics to understand how it works and how well it performs. This can help to show which blockchains and native cryptocurrencies are being used the most and which ones might have problems traders and investors should be aware of. It's important to know that even ChatGPT, an imposing AI model, can still make mistakes called AI hallucinations. It will make mistakes as confidently as it does things right, so be careful. How AI trading automation works. Automated trading uses computer programs to make trades for the trader according to specific rules. We want to make trading easier and involve fewer people. This stops emotions from affecting trading choices. Emotions can make traders panic or become too sure of themselves, making trades that don't make sense. AI algorithms improve trading decisions by learning from data and adapting to new information. AI-based trading bots can use reinforcement, machines, and deep learning in various ways. Machine learning teaches a computer program using old data to predict what new data will be like. Deep learning is a type of machine learning that uses networks of connected nodes to understand and predict information from data. Reinforcement learning teaches AI algorithms to learn by rewarding them for correct decisions and punishing them for wrong choices. Once a computer program has learned how to gather and study information, it can be tested to see if it can make good choices based on past information. This helps us know if we can trust it to predict future prices. The AI program can make trades based on what it thinks the prices will do. For example, if a computer program predicts that the bitcoin price will go up, it can automatically buy a certain amount of the coin. If it thinks the price of bitcoin will go down, it can sell some or all of the bitcoin it owns.

Panther Protocol will soon enable Shielded Pools to be divided into infinitely customizable Zones, empowering institutions to create compliance controls and manage risk within DeFi. Each Zone, led by a Zone Manager, will offer granular control over user access, ensuring confidentiality while supporting regulatory compliance. This breakthrough will allow institutions to operate securely and privately in decentralized finance. Learn more about how Panther Protocol’s Zones will revolutionize risk management in DeFi: https://lnkd.in/gy_aBEnX

🌐 As institutional interest in #DeFi grows, so does the need for robust risk management as they face a number of obstacles. At LWorks, we’re driving DeFi forward with secure, institutional-grade solutions. Read more 👇

Great article on #tokenization - “linking financial assets to digital tokens traded on distributed ledgers”. I love the insights from Roy Ben-Hur Cynthia Lo Bessette Artem Korenyuk and Emma Lovett. Among the tokenization considerations referenced in operations, regulation, and technology, don’t forget #tax. If the design elements bring new rights and obligations to the issuer or holder of the underlying asset, you may end up with the token representing something entirely different than what you intended from a tax perspective. Don’t forget to pause during the design, take a step back and ask that key question: “What’s the thing?!?” And if you need a branded Deloitte T-shirt to remind you, reach out to me directly. Tim Davis Brian Hansen Wendy Henry Conor O'Brien Alex Lakhanpal, CFA, CPA CJ Burke Agha Khan Raquel Look Scott Lasher Richard Rosenthal #crypto #blockchain #digitalassets

📃Scientific paper: Real-time Risk Metrics for Programmatic Stablecoin Crypto Asset-Liability Management (CALM) Abstract: Stablecoins have turned out to be the "killer" use case of the growing digital asset space. However, risk management frameworks, including regulatory ones, have been largely absent. In this paper, we address the critical question of measuring and managing risk in stablecoin protocols, which operate on public blockchain infrastructure. The on-chain environment makes it possible to monitor risk and automate its management via transparent smart-contracts in real-time. We propose two risk metrics covering capitalization and liquidity of stablecoin protocols. We then explore in a case-study type analysis how our risk management framework can be applied to DAI, the biggest decentralized stablecoin by market capitalisation to-date, governed by MakerDAO. Based on our findings, we recommend that the protocol explores implementing automatic capital buffer adjustments and dynamic maturity gap matching. Our analysis demonstrates the practical benefits for scalable (prudential) risk management stemming from real-time availability of high-quality, granular, tamper-resistant on-chain data in the digital asset space. We name this approach Crypto Asset-Liability Management (CALM). ;Comment: The authors would like to thank Professor Moorad Choudhry for review comments on an earlier draft. Submitted for the SNB-CIF Conference on Cryptoassets and Financial Innovation, 24 May 2024 Continued on ES/IODE ➡️ https://etcse.fr/M4q3 ------- If you find this interesting, feel free to follow, comment and share. We need your help to enhance our visibility, so that our platform continues to serve you.