Asia’s Victory: US Crypto Crackdown Benefits Asia

2023-07-05, 06:26

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Due to the United States’s crackdown on cryptocurrency activities several crypto companies are relocating to Asia.

Singapore and Japan are examples of Asian countries that have clear and comprehensive crypto regulations.

Ripple, Circle and Gemini have shown interest in opening branches in Asian countries.

**Keywords**: Crypto regulation, crypto legislation, crypto adoption, crypto restriction, US crypto regulation, crypto in Asia, crypto in China, Asian crypto laws, regulations in USA 
## Introduction
There is regulatory uncertainty in the United States which is negatively affecting the crypto industry in the country. For example, there is no clarity as yet on the classification of cryptocurrencies. In the meantime, the United States SEC has been cracking down on various crypto activities amid unclear crypto regulations in the USA.

Already, several crypto firms such as Binance and Coinbase have been heavily affected by the strong handedness the SEC is using in its crypto regulatory oversight. Today, we discuss how the United States crackdown on crypto activities is benefiting Asia. 
## Asia Benefits from the United States’ Crackdown on Crypto Activities
The United States’ restrictive actions against cryptocurrency activities is forcing many crypto firms to relocate to Asia where there are friendly regulations on digital assets. In fact, several Asian countries have adopted clear regulations that govern cryptocurrencies and other digital assets.

Read also: [SEC Labels 37 Cryptocurrencies as Securities ](https://www.gate.io/de/blog_detail/2708/sec-labels-37-cryptocurrencies-as-securities-implications-for-trading "SEC Labels 37 Cryptocurrencies as Securities ")

In general terms, there are diverse crypto regulations in Asia. Nevertheless, most of the countries are promoting crypto adoptions and are proactive in introducing measures that foster innovations in the blockchain sector. Japan, Singapore and Hong Kong are examples of countries that are attracting crypto investments.

Although most Asian crypto laws promote the adoption of the blockchain technology and the use of crypto assets, some countries like China and India have strong crypto restrictions. For example, China does not allow the use of cryptocurrencies in the country. On the other hand, India introduced a draconian tax crypto legislation which inhibits the use of digital assets. 
## Countries where Crypto Firms Relocating from USA May Establish their Businesses
Although sseveral Asian countries are receptive to cryptocurrency trading, Japan, Hong Kong and Singapore are the most attractive destinations for crypto businesses. 
### Hong Kong, a Safe Destination for Crypto Businesses
Definitely, Hong Kong will benefit from the exodus of crypto firms from the United States to Asia. This is because there is a thriving blockchain industry in the country. Also, the country is promoting the development of blockchain technology as well as creating a suitable environment for crypto businesses to flourish.

Recently Hong Kong introduced a new crypto regulation framework earmarked to protect both the consumers and crypto businesses. For example, Hong Kong has adopted the virtual asset service provider (VASP) licensing system which is one of the most comprehensive pieces of crypto legislation in Asia.

With this, the virtual asset service providers should register their businesses in order to provide their services. It has also aligned its money laundering and terrorist financing (ML/TF) risk assessment with the virtual asset service provider (VASP) licensing system. Such clear crypto legislation is a testimony that [Hong Kong is a friendly](https://www.gate.io/blog_detail/2206/gateio-market-watch-hong-kongs-new-crypto-policy-triggers-market-rise "Hong Kong is a friendly") destination for established and emerging crypto businesses.  
### Singapore, Another Safe Destination for Crypto Businesses
Singapore ranks as one of the top destinations for crypto businesses that are leaving the United States. Apart from the well-established crypto infrastructure it also has clear regulations that support crypto activities. As an example, the country requires all crypto firms to register with the relevant authorities before offering their services.

Currently, several crypto firms like Revolut and Coinhako are registered in the country and provide various crypto products and services. The country also supports blockchain and crypto innovations as long as they offer utility to the citizens. 
### Japan, Another Safe Destination for Crypto Businesses
Japan has regulatory clarity as well as supportive infrastructure. For example, it has clear guidelines on how crypto exchanges can register with the authorities. Already, the country has many crypto business startups as well as skilled professionals with relevant expertise and experience suitable for the crypto sector. 
## Crypto Companies Migrating to Asia Amid Regulatory Uncertainty in USA
Many crypto companies and investors are relocating from the United States to Asia as a result of USA’s current harsh regulatory oversight. For instance, the threat of the Securities and Exchange Commission (SEC) is forcing Coinbase to move offshore to the Asian market. Ripple has also obtained a license to operate in Singapore. In addition, the Monetary Authority of Singapore has also granted Circle, the stablecoin issuer, a license to operate in the country.

Related news: [Cryptocurrency laws in United States and other countries](https://www.gate.io/blog_detail/384/ "Cryptocurrency laws in United States and other countries")

Gemini is another crypto exchange that is planning to open an offshore exchange in Asia. Already, Binance, Gate.io, OKEX and <a href="/price/huobi-ht" target="_blank" class="blog_inner_link">Huobi</a> have branches in Asia. On top of that,Jump Crypto, the world’s largest market maker, is also considering opening some branches offshore. And its planned destination is Asia. 
## Comparison of Crypto Regulation in Asian Countries and the United States
There are similarities and differences between US crypto regulation and Crypto in Asia legislation. Let’s briefly compare crypto regulations in the two territories. 
United States

| United States   | Asia  |
| ------------ | ------------ |
| It has not yet introduced specific crypto regulations. It uses its financial regulations to govern crypto activities.   | Several Asian countries including Singapore and Hong Kong have introduced comprehensive crypto regulations.   |
| It uses the Howey Test Criteria to classify crypto securities.   |  Although some countries use the Howey Test Criteria, others do not.  |
| It has not banned cryptocurrencies.   | Some Asian countries like China have banned cryptocurrency trading.   |
| It does not have separate crypto tax laws. Cryptocurrencies are classified either as securities or commodities.   | Some countries like India have specific tax laws that apply to the crypto sector.  |
| It has not banned cryptocurrency mining.  | China has banned cryptocurrency mining.   |

## Crypto in China vs Crypto in Hong Kong: Regulations
Crypto regulations in China are completely different from that of Hong Kong. China has completely banned trading in cryptocurrencies and other digital assets. Similarly, it does not allow mining of cryptocurrencies. The only digital asset it allows is its Central Bank Digital Currency (CBDC), the eYuan.

Read also: [Hong Kong Sees A Stronger Future For Web3](https://www.gate.io/blog_detail/2306/gateio-market-watch-hong-kong-sees-a-stronger-future-for-web3 "Hong Kong Sees A Stronger Future For Web3")

On the other hand, Hong Kong allows trading of different cryptocurrencies and other digital assets like NFTs. Again, the virtual asset service provider (VASP) licensing regime allows crypto firms to register with the relevant authority before providing the various crypto products and services.

Hong Kong considers all registered virtual asset service providers (VASPs) as financial institutions and should abide by the AML/CFT requirements. This means that they are also subject to supervision by Hong Kong Securities and Future Commission (SFC).

Read also: [Hong Kong May Become the New Crypto Mecca](https://www.gate.io/blog_detail/1730/gate-io-ceo-says-hong-kong-may-become-the-new-crypto-mecca "Hong Kong May Become the New Crypto Mecca")
## Conclusion 
The United States’ continued crackdown on crypto activities in the country is forcing various crypto firms to relocate to Asian [countries like Singapore](https://www.gate.io/blog_detail/378 "countries like Singapore"), Japan and Hong Kong. Ripples, Circle and Gemini are examples of notable crypto companies that are planning to open crypto businesses in Asia. This is likely to increase crypto adoption and innovation in the region.

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<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
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