The cryptocurrency sector is based on technological innovations, and the US has been the ultimate leader and promoter for some years. However, the recent tightening of cryptocurrency regulations and harsh enforcement erode the crypto-friendly context, forcing exit.
The aggresive approach has rendered the US crypto business environment unsuitable to many firms, which contrasts with Hong Kong’s crypto-friendly approach.
Is US Crackdown on Crypto Exchanges Transforming Hong Kong into Global Crypto Hub?
Ambre Soubiran, the CEO of a Paris-based crypto Company (Kaiko), believes that Hong Kong’s peaceful business environment will attract many crypto investments. She stated that Hong Kong would benefit from the US mistakes and anticipates that many investors, developers, and crypto companies would shift to this friendly zone.
Soubiran views regulators’ recent crackdown on stable and struggling crypto companies in the US will place Hong Kong in its primary objective of becoming a World crypto hub. Hong Kong has flexible regulations compared to the US, which has recently been strict, and it is an automatic assurance that crypto investments and assets are moving to China.
Regulatory Clarity in Hong Kong’s Innovation Oriented Policy
She added that Hong Kong is emerging as a preferred destination, especially for crypto companies that desire to maintain proximity to their critical customers. Notably, Hong Kong portrays a divergent path, as revealed by amended government plans unveiled in January 2023.
The government intends to design a catalyst-oriented regulation to help fintech companies and best-quality crypto. Hong Kong Futures Commission and Securities structured a crypto licensing procedure to protect crypto clients without interfering with innovation.
Hong Kong’s Secretary for the Treasury and Financial Services Christian Hu revealed that about 80 digital asset-related companies had shown interest to establish businesses there. About 20 crypto companies have shown positive signs of moving to Hong Kong and operating from there.
Continued Purge by US Regulators Triggering Mass Exodus to Other Jurisdictions
Hong Kong SFA and the Monetary Authority plan to have an open-door meeting about designing and supporting a government-backed partnership between domestic banking and crypto investors on 28 April 2023. Several Chinese banks, including the Bank of China, have recently begun offering banking services to crypto investors in Hong Kong.
According to Soubiran, Kaiko confirmed establishing its new Asia-Pacific headquarters in Hong Kong from Singapore by April 2023. Friendly crypto regulations and support facilitate the relocation. Hong Kong portrays regulatory clarity with its precise crypto legislation framework set to attract the leading cryptocurrency companies.
After the collapse of FTX in November 2022, the US government became strict and aggressive toward crypto trading. Political leaders, including Senator Elizabeth Warren, declared recently assembling an army ready to wrestle crypto operators she considers a huge hindrance.
These events in the US could make Hong Kong an irresistible destination to establish crypto activities based on its healthy and progressive regulation.
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