Hong Kong's controversial crypto law restricts competitor efforts to attract Bitcoin millionaires.

Sam Bankman-Fried's stay in Hong Kong was short but very rewarding. Knowing how to sleep in an office After spending three years in town, the staff developed FTX, a cryptocurrency exchange that has grown into one of the largest markets in the world. The success of this business makes Sam Bankman-Fried the richest man in the cryptocurrency industry, with a net worth of $ 26.5 billion at the age of 29. And he left Hong Kong.

In September, Sam Bankman-Fried flew to the Bahamas. When the FTX team welcomed the President of the Bahamas to their new headquarters, the uniform change surprised many fans. Why choose the Bahamas?

“It's very important for crypto companies to have long-term management and focus,” he said from his Caribbean office. "Hong Kong has yet to come up with a real bill. The main benefits are still uncertain."

사진: Sam Bankman-Fried, PDG de Crypto Derivatives Exchange FTX

Hong Kong has become a hotbed for blockchain and crypto related industries. Many major players in the global crypto industry have started in Hong Kong including exchanges CryptoCom, Bitfinex, OSL, etc. The world's largest securities firm, Tether, also started in Hong Kong. According to data from blockchain data firm Chainalysis, Hong Kong gained access to $ 60 billion in crypto assets between July 2020 and June 2021.

However, mismanagement in Hong Kong has led some crypto companies to move their operations to other markets, and regulators have maintained the right to promote faster crypto trading. for

Singapore is the closest, and since opening their doors to the crypto industry in January 2020, Brian Armstrong's Coinbase, Zhao Changpeng's Binance, and Winklevoss Twin Gemini have set up shopping malls in Singapore once for. all.

The Financial Services Corporation of Singapore (MAS) announced that it had received 170 licensed crypto applications from service-related service providers in July. Financial executives have so far rejected two candidates, but three competitors, the Independent Reserve Bank of Australia Exchange and DBS Bank and Singaporean fintech brokerage distributor Fomo Pay, have reported receiving crypto for 3 months. Patent. Cryptocurrency exchange Coinhako announced in November that it had been temporarily approved by MAS and had become the regulatory cryptocurrency exchange in Korea. To date, around 70 crypto-related vendors have been granted temporary exemptions, allowing them to operate for six months without a license.

According to data from CoinGecko, CryptoCom, the world's third largest cryptocurrency exchange by 24-hour trading volume, moved its headquarters from Hong Kong to Singapore this year. Eqonex Group is a NASDAQ listed financial services company that established a cryptocurrency exchange in Singapore last year and operates other businesses in Hong Kong. Diginex, the first company, was subject to Hong Kong regulations which restricted crypto derivatives and exchanges to professional investors.

Richard Byworth, CEO of Eqonex Group, said: “I don't think these two things are really true, and they are different from the way we design our products.

In 2019, Hong Kong introduced a selection of licenses for its platform that allows traders to buy and sell security symbols. Security tokens are traditional products and contracts in digital form, but most crypto assets are out of framework order. In addition, it was agreed that the exchange would only work for investors with a minimum investment of HK $ 8 million (US $ 1 million). It is also prohibited to trade cryptocurrency and derivative futures contracts with traders.

To date, the only company licensed in Hong Kong is the OSL cryptocurrency exchange. In November, the Security and Futures Commission (SFC) said it was reviewing applications from several companies.

Hong Kong authorities are now discussing the potential for fraudulent licensing of exchanges supplying the crypto industry, including Bitcoin and other crypto assets that were previously excluded. However, the idea is still to ban cryptocurrency exchanges operating in Hong Kong to only work for profitable investors.

OSL CEO Wayne Te said, “To be fair, it's not easy to follow the rules. But in my opinion, the Hong Kong rules are aimed at providing maximum protection for digital traders all over the world. world. "flow. for

Photo: Wayne Trunchy, CEO of Hong Kong digital asset trading platform OSL

However, some believe that if the only option for a trader is to use illegal exchanges to trade crypto assets in Hong Kong, this rule would make investors' business riskier. Henri Arslanian, Crypto Director at PricewaterhouseCoopers, a Hong Kong-based global marketing and research firm, said: Realistically and ironically, this puts the public at risk. "

According to a recent study published by Visa Payments, around a third of Hong Kong residents have invested, traded or traded crypto assets in exchanges and services. These results show that the population of Hong Kong lags behind the United States in terms of participation in digital heritage.

Byworth of Eqonex said Hong Kong also has another great opportunity to make it easier for Hong Kong companies to acquire and retain talent internationally. “Even though Hong Kong is in decline in terms of crypto governance and more and more technology is coming out of Singapore, it could gain significant economic value if it decides to change its practices and move to corporate management. easier.

Photo: Visitors to Hong Kong Fintech Weekly walk past the booth with the Bitcoin and Ethereum logos on November 4, 2021.

At the same time, Singapore has opened its borders to travelers who have been vaccinated from at least 18 countries. In addition to the easy start-up travel restrictions, Singapore's well-run management system has made Singapore even more beautiful. China recently banned all cryptocurrency and mining exchanges, and South Korea closed nearly 40 non-compliant cryptocurrency exchanges in September.

Coinbase debuted in Japan in August and had a positive impact on Japan. After Mt. The Gox exchange was hacked in 2017 and suffered $ 460 million in bitcoin as Japan began to regulate cryptocurrencies. However, cryptocurrency smuggling remains a problem in Japan, and only a few months ago the Japanese trading platform Liquid was hit as well. for

Singapore would surely not be happy with the situation. Singapore would have to decide whether or not to allow crypto currency trading, depending on the future and the options available in the market for a variety of "perpetual futures" strategies - futures contracts with no expiration date.

Singapore's Monetary Authority said last year it would not review cryptocurrency derivatives unless there is a swap deal, and the agency has warned investors in danger.

The point is, only a few countries have started discussing cryptocurrency derivatives. Arslanian of PricewaterhouseCoopers says, “There is no such thing as one-size-fits-all cryptocurrency management. The crypto industry needs to be realistic and operational.

The Bahamas is making rapid progress to improve the overall environment for cryptocurrency and derivatives trading by the end of 2020, offering leading edge and success in this regard.

According to Sam Bankman-Fried, trade restrictions are not as important as restrictions that prevent companies from providing services elsewhere in the world. "For many businesses, it's not about getting more businesses to focus on the local audience, but because their home is their most important priority."