Singapore, Hong Kong could emerge as crypto hubs as US cracks down on industry

Singapore was one of the first nations to establish regulations for the industry, while Hong Kong’s proximity to China could give it an edge

Amid the US SEC’s fines, penalties against crypto-lending firms and bank officials’ tough talk, the US has yet to establish regulations for the industry

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Advertisements for crypto exchange in Hong Kong. Asia’s financial hubs Hong Kong and Singapore are well-positioned to emerge as new centres of the global cryptocurrency system following a crackdown on companies in the US. Photo: Reuters

Published: 12:00pm, 4 Jun 2023Updated: 2:22pm, 6 Jun 2023

Asia’s financial hubs Hong Kong and Singapore are well-positioned to emerge as new centres of the global cryptocurrency system following a crackdown on companies in the United States, industry executives have said.

The US Securities and Exchange Commission (SEC) has levied fines and other penalties against crypto-lending firms, while bank officials have issued policy statements that amount to making it tough for crypto firms to access credit.

That followed market turmoil last year, which caused several cryptocurrency companies to file for bankruptcy. For years regarded as one of the most reliable firms, the FTX crypto exchange failed almost overnight in November, and its founder Sam Bankman-Fried was charged with orchestrating a fraud.

Customers in a cryptocurrency exchange office in Hong Kong. Hong Kong rules to allow retail trading of cryptocurrencies took effect on June 1. Photo: AFP

Though it has been a cryptocurrency hub, the US has yet to come up with a comprehensive set of regulations that allows cryptocurrency and blockchain firms to operate transparently without fear of regulatory action.

But Hong Kong and Singapore appear ahead of the game.

Hong Kong’s Securities and Futures Commission has finalised rules to allow retail trading of cryptocurrencies from June 1. The rules will allow licensed exchanges to sell to retail investors cryptocurrencies with large market capitalisation and high liquidity, and platforms have been allowed to start applying for a licence.

Singapore already has in place a set of regulations, which were one of the first globally.

Singapore, Hong Kong could emerge as crypto hubs as US cracks down on industry

Singapore was one of the first nations to establish regulations for the industry, while Hong Kong’s proximity to China could give it an edge Amid the US SEC’s fines, penalties against crypto-lending firms and bank officials’ tough talk, the US has yet to establish regulations for the industry