As China cracks down on cryptocurrency, crypto groups gather in Singapore

capital. com team

The crypto dynamics in Asia are changing rapidly, leaving Singapore perhaps as one of the few remaining crypto hubs in the region.

In the last months, China has been toughening its stance against cryptocurrency, often causing major price fluctuations. In June, it caused Bitcoin to dip below $30,000 for the first time since January, after telling the country’s financial giants to stop trading in cryptos.  At the beginning of July, the Chinese dragon roars were heard again with a new crypto crackdown led by the government. More recently, the Chinese authorities punished a company for allegedly being involved in crypto trading activities.  As a result, the country’s persecuted crypto traders are exploring other options. Some of them are moving to Singapore, according to an article by the Financial Times, to join the crypto trading movement.

So far, over 300 crypto companies from different parts of the world have applied for licenses to operate in Singapore, according to Bloomberg, and many have already launched their trading operations in the city-state.

Singapore’s regulatory environment and potential for growth make it a very attractive destination for crypto firms that face regulatory storms elsewhere. Most recently, exchange firm Binance moved its operations to Singapore after it was banned in the UK from carrying out regulated activities. The UK isn’t the only country Binance had regulatory troubles with. It also faced problems in Japan, Germany and Ontario, Canada.  Another firm that moved to the city-state of Singapore is Gemini, a US exchange that was founded by the Winklevoss twins. Chinese billionaire Jihan Wu also established a fintech platform in Singapore in 2019.

How does Singapore roll the carpet for foreign crypto innovators?

The country’s central bank, the Monetary Authority of Singapore (MAS) is making it easier for crypto innovators to establish their businesses in the affluent island nation. While all crypto-exchange companies are required by law to have formal licenses to operate in the country, they can apply to the MAS for an exemption until their license applications are finalised. This allows them to serve local retail and institutional investors before the licenses are finalised. MAS, according to Bloomberg, is applying “robust standards” in assessing all the applications. At the same time, it considers a number of factors such as the applicant’s ability to implement strong measures against illicit flows, and also evaluates the fitness of shareholders and key appointment holders.

MAS plans to closely monitor the cryptocurrency ecosystem to prevent laundering and illegal activities. However, it clearly doesn’t its approach to date suggests it doesn’t want to stifle innovation and entrepreneurship.

Singapore Exchange has added two cryptocurrency indices. At the same time, Singapore-based sovereign wealth fund GIC and state-backed investment company Temasek have spent hundreds of millions of dollars investing in the cryptocurrency sector.

Cryptocurrencies are not yet legal tender in Singapore, like in El Salvador for example, but are instead labelled as goods that can be used for exchange. There are also certain restrictions on the limits of transactions. However, there is appears to be a positive climate that could nurture fintech and crypto innovations. In Singapore, cryptocurrencies are exempt from capital gains taxes.

Singapore as Asia’s New Cryprohub

The crypto dynamics in Asia are changing rapidly, leaving Singapore perhaps as one of the few remaining crypto hubs in the region. Initial adopters of blockchain technology such as China, Hong Kong and South Korea have been changing their outlook on cryptocurrency. Both China and South Korea have clamped down on crypto exchanges in recent months. Hong Kong so far has been considered as one of the most crypto-friendly countries in the world, however, it is vulnerable to the uncertainty that surrounds China.

A recent study by Crypto Head revealed that Singapore currently ranks third behind the US and Cyprus as the most crypto-friendly country in the world.

The article contains market commentary information, it should not be regarded as investment research or investment advice. Past performance is not a reliable indicator for the future.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.25% of retail investor accounts lose money when trading CFD

Crypto Derivatives are not available to Retail clients registered with Capital Com (UK) Ltd.

Capital Com (UK) Limited is registered in England and Wales with company registration number 10506220, authorised and regulated by the Financial Conduct Authority (FCA) under register number 793714.

Capital Com SV Investments Limited is a regulated Cyprus Investment Firm, registration number HE 354252, authorised and regulated by the Cyprus Securities and Exchange Commission under the license number 319/17 (both entities referred together as “we”, “Company” or “Capital.com”).

Closed joint-stock company “Capital Com Bel” is regulated by National Bank of the Republic of Belarus, registered by Minsk city executive committee 19.03.2019 with company registration number 193225654. Address: 220030, the Republic of Belarus, Minsk, Internatsionalnaya street 36/1, office 823. Certificate of inclusion in the register of forex companies No. 16 dated 16.04.2019.

Read this next

Digital Assets

SEC denies First Trust Advisors-SkyBridge application for Bitcoin ETF

The US Securities and Exchange Commission (SEC) has again rejected another bid to list a spot bitcoin exchange-traded fund (ETF), which is widely seen as a proxy into crypto for millions of retail investors.

Technology

Crypto fund Modus.Trade taps Gold-i to manage its technology infrastructure

Modus.Trade, which operates an investor network, online learning platform, and suite of algorithmic trading strategies, has selected FinTech company Gold-i to manage its entire technology infrastructure.

Industry News

Ripple’s “biggest victory” triggers XRP Holders’ request for unprivileged SEC meetings

“The biggest victory for Ripple and XRPHolders, from Judge Netburn’s recent decision, isn’t necessarily the email with the Draft version of the Hinman speech.”

Retail FX

Fintech Alpaca poaches Pepperstone Cyprus head Victor Zachariades

Victor Zachariades, who joined Pepperstone in 2019 to head up its Cyprus operations, has left the FX firm to join Alpaca, a stock brokerage that allows developers to build apps, services, and trading platforms.

Industry News

Public.com acquires HyperCharts to improve broker’s data visualization

“One chart is worth 1,000 numbers. We built HyperCharts to make financial analysis easy, fun, and approachable for the masses by turning complex SEC filings into simple, interactive charts.”

Institutional FX

FX HedgePool launches mid-month roll cycle for better pools of peer liquidity

“By introducing this new cycle, we’re offering the buy-side greater choice with respect to accessing safe and transparent pools of peer liquidity.”

Digital Assets

Robinhood launches Beta version of crypto wallet

Wallets will allow Robinhood users to send and receive their crypto from Robinhood to external crypto wallets, fully connecting Robinhood crypto holders to the greater blockchain ecosystem for the very first time – a major milestone for the broker’s venture into crypto.

Industry News

JKO Play drops out of running to acquire Playtech

A consortium called JKO Play, led by former Formula 1 boss Eddie Jordan and gambling industry veteran Keith O’Loughlin, has pulled out of the race to acquire Playtech.

Institutional FX

ABN AMRO launches fractional investing infrastrucutre, BUX is first broker client

“The launch of fractional investing marks an important new chapter in the normalization of investing in Europe.”

<