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FormosaVerse discusses Web 3.0, aftermath of FTX in Taiwan

Twitter Spaces talk cryptocurrencies and Tokenomics

Experts debate future Web 3.0 regulations and crypto.

(Taiwan News photo)

Experts debate future Web 3.0 regulations and crypto. (Taiwan News photo)

TAIPEI (Taiwan News) —The recent collapse of FTX proved a stark warning to investors once eager to invest their life savings in cryptocurrencies, coins, and tokens.

A Twitter Spaces discussion recently brought together journalists, venture capitalists, and those providing Web 3.0 services to debate the state of the crypto industry and impending regulation, with a recording of the discussion available.

“Everyone knows about the collapse of FTX. It was the second largest exchange and was endorsed by lots of governments and institutions who had strong confidence in the exchange,” said CK Wang (王俊凱), founding partner and Co-CIO of MK2 Capital.

Wang says it is unfortunate the exchange collapsed as it was the first step into cryptocurrency for many cryptocurrency newcomers. As the exchange imploded in real time, many investors lost everything, leaving them reluctant to undertake future investments.

FormosaVerse discusses Web 3.0, aftermath of FTX in Taiwan

An online discussion was recently held to debate future Web 3.0 regulations. (FormosaVerse image)

To regain investor confidence, the obvious course of action is more government regulation, though others believe the blockchain and decentralized finance (DeFi) could solve the problem.

“Something is not fundamentally wrong with crypto. The nature of blockchain is decentralization and governance by code which is transparent,” said Consola Finance Head of Business Development, Antoine Tsao (曹).

Tsao believes many people are primarily concerned about the custody of cryptocurrencies at the moment. “You can connect a wallet easily, but now, many use a burner wallet at first, as people are aware of the danger of self-custody. Newer Web 3.0 companies are even backtracking to email systems for security.”

Tsao believes the collapse of FTX was due to the fact that it was a centralized exchange (CEX) governed and operated by a single organization. Bitcoin, like other cryptocurrencies, insists on decentralization (DeFi) where many other entities maintain ledgers and oversee crypto trading.

All the doubt and uncertainty associated with cryptocurrencies has stalled the development of Web 3.0, an ecosystem which many people believe will be dependent upon the use of cryptocurrencies to make purchases such as NFTs.

“At the moment, some newly emerging projects are about Web 2.5 as a sort of business model. They are asking how we can do business and use the blockchain as a tool but still make use of fiat-backed assets for things like travel services," said Wang.

Bridging Web 2.0 and Web 3.0 is currently a hot topic of debate, with some wondering if coexistence is possible. Additionally, many are curious about how governments will manage risk and oversee technology that is rapidly advancing.

“The government still does not know how to identify crypto as an asset, a product, or something else. There’s an investment platform in Taiwan that was involved with FTX and is being sued by the government because they are not a certified financial institution. But there are no specific rules to follow governing what they should or should not do,” said Wang.

“Talking about Steaker, the media is trying to paint as bad a picture as they can without giving details. The media says they shouldn’t do what banks don’t do without a permit, but it is hard to stay compliant,” said Tsao.

He adds that local regulations governing security token offerings (STO) were rolled out 3 years ago and still nothing has happened yet. “If they make it too restrictive, it will move out of Taiwan. China has already lost all of their most important projects which went to Singapore and is now a huge hub for crypto,” said Tsao.

And though times are turbulent in cryptocurrencies, Tsao offers a prophetic warning, "losing a whole industry because of ignorance is something we don’t want to see."