US crash will push crypto center of gravity to Hong Kong: Kaiko boss

by · April 2, 2023

The US government’s frosty approach to cryptocurrency regulation could eventually lead to the industry’s “center of gravity” shifting to Hong Kong, said Ambre Soubiran, CEO of Paris-based institutional crypto market data provider Kaiko.

The US has been at the forefront of the crypto sector for quite some time. But with the government seemingly adopting a regulation-by-enforcement approach, there is a growing feeling among some that a significant amount of companies, developers and investors will soon flock elsewhere to work in friendlier environments.

Speaking to The Wall Street Journal on April 1, Soubiran suggested that the recent crackdown on crypto in the US will inadvertently help Hong Kong in its goal of becoming a major crypto hub:

“The fact that the US is stricter these days than ever on crypto and Hong Kong’s regulation in a more favorable way … is going to clearly shift the center of gravity of crypto asset trading and investment more towards Hong Kong.”

“We want to be where our customers are,” she added.

The US government has become increasingly aggressive against crypto since the collapse of FTX in November 2022, with Senator Elizabeth Warren recently stating that they are building an “anti-crypto army.” However, Hong Kong has moved in the other direction.

In January, the Hong Kong government initially outlined plans to become a crypto hub by rolling out progressive regulation to support high-quality crypto and fintech firms by 2023.

While regulation has yet to be fully eradicated, Hong Kong’s Securities and Futures Commission (SFC) proposed a crypto licensing regime on February 20, which aims to provide consumer protection without stifling innovation.

So far, more than 80 virtual asset-related firms have expressed interest in setting up shop there, according to a March 20 speech by Hong Kong’s Secretary for Financial Services and the Ministry of Finance, Christian Hu.

He also noted that 23 crypto firms in particular have already indicated that “they planned to establish their presence.”

Adding to the positivity coming from the Special Administrative Region of China, Bloomberg reported on March 28 that the Hong Kong Monetary Authority and the SFA are set to hold a joint meeting on April 28 to help crypto firms establish domestic banking partnerships.

Chinese banks, such as Shanghai Pudong Development Bank, Bank of Communications and Bank of China, have reportedly started offering banking services to crypto firms in Hong Kong or made inquiries to crypto firms.

Related: Hong Kong fund plans to raise $100 million for crypto investment

Soubiran also revealed in mid-March that Kaiko wants to move the headquarters of its Asia-Pacific unit from Singapore to Hong Kong in response to the country’s crypto-friendly attitude.

“What we see is a clear support for more clarity in the regulatory framework in Hong Kong,” she told Bloomberg in an interview, adding that “while we see an increased attractiveness of Hong Kong in the region, we are moving .”

Related: Asia Express: US, China try to crush Binance, SBF’s $40m bribe claim