The uncertainty of cryptocurrency regulation by the U.S. government forces crypto companies executives to consider Hong Kong as a “relocation” site.
Regulatory uncertainty in the U.S. cryptocurrency market significantly increases the risks of cryptocurrency companies fleeing the country. For example, it became known that the cryptocurrency exchange Bittrex will suspend its activities in the country from April 30, 2023.
The main reason for this decision was “continued regulatory uncertainty.” Company representatives report that it is “not economically viable for Bittrex to continue operating in the current U.S. regulatory and economic environment.” Trading on the platform will be available until April 14, 2023. The company’s founders said that Bittrex Global will look for growth opportunities outside of the United States.
In total, according to a Twitter post by cryptocurrency exchange Coinbase, “1 million tech jobs are at risk of going overseas.”
Recall that the crypto community accused the U.S. government of organizing a “crackdown on the crypto industry” after the closure of crypto-friendly Silvergate Bank and Silicon Valley Bank, as well as the forced withdrawal of cryptocurrency deposits from the bankrupt Signature Bank.
At the same time, Hong Kong is seen by industry representatives as the most promising jurisdiction. Thus, according to Ambre Soubiran, CEO of cryptocurrency market data provider Kaiko, regulation of the cryptocurrency market in the U.S. through enforcement shifts the “center of gravity” of the industry to Hong Kong, as local authorities “create conditions for cryptocurrencies to flourish.” By the way, Kaiko plans to open a division in Hong Kong, which will work with local customers.
Cryptocurrency exchange Bybit also revealed its plans to open a representative office in Hong Kong. In particular, the company plans to move some of its R&D and marketing teams to the region. At the moment, representatives of Bybit are going to apply for a license to operate from the Securities and Futures Commission of Hong Kong (SFC).
As a reminder, the SFC announced plans to issue licenses to cryptocurrency exchanges, prompting many cryptocurrency companies to expand their regional offices. It also became known that the largest banks in China began to actively offer their services to cryptocurrency firms that plan to operate in Hong Kong.
