A Hong Kong lawmaker is advocating for a legal framework to regulate Decentralized Autonomous Organizations (DAOs) following a recent court ruling involving a decentralized organization.

Hong Kong may soon develop regulations for DAOs as Johnny Ng Kit-chong, a member of the Legislative Council, pushes for clearer rules to enhance stability in the Web3 sector. Ng believes that a structured legal framework could attract international talent and investment, bolstering Hong Kong’s status in the evolving crypto landscape.

To foster Web3 and virtual asset development in Hong Kong, the HKSAR Legislative Council has established a Subcommittee on Web3 and Virtual Asset Development. Ng’s office seeks to gather insights from the global Web3 industry and propose policy recommendations to advance the sector.

“I hope the government can improve the ecology of Web3 and regulate DAOs legally so that more people in the industry will come to Hong Kong to develop their projects and bring in capital and talent.”

This is not the first time Ng has called for regulatory clarity for DAOs. In July, he publicly urged for clear policy and regulatory guidelines to support the healthy development of these entities in Hong Kong. The latest call follows a landmark ruling by Hong Kong’s High Court, which ordered six defendants in the Mantra DAO case to disclose financial details over allegations of misappropriating HK$6 billion (approximately $767 million).

Ng has been a vocal supporter of crypto-friendly regulations in Hong Kong. In early August, he emphasized the need for the city to expand virtual banking services for Web3 startups, which often face challenges in accessing financial services. Ng proposed that virtual banks should better cater to Web3 companies to accelerate the development of Hong Kong’s digital ecosystem. He asserted that “virtual asset policies have become the focus of global government discussions.”

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