Singapore and Hong Kong have now emerged as the leading business-friendly destinations for East Asian crypto companies aiming to raise funds via Initial Coin Offerings (ICOs).
This can be owed to the fact that the number of companies launching ICOs in Singapore and Hong Kong “has skyrocketed in recent months,”
Singapore is now named as the third largest ICO launchpad in the world, only behind U.S and Switzerland, regarding funds raised.
Anson Zeall, chairman of Association of Cryptocurrency Enterprises and Startups in Singapore, informs that while it may be too early to term the city as an “ICO hub,” owing to a reasonable amount of undone work, a lot of significant activity and token issuances have taken place in the city since September 2017. He said,
“We cannot say Singapore has become an ICO hub yet, as more work needs to be done, but yes, there has been a lot of activity since September last year.”
He believes the crackdown on cryptocurrencies by China might be the reason.
“In September, Beijing defined an ICO as an illegal fundraising tool after concerns over financial scams and money laundering. Dozens of ICO platforms in the country have since shut down,”
Hong Kong and Singapore, both countries do not have any specific ICO regulations.
After increasing worries over the scams related to finance and money laundering, China placed a blanket ban on ICOs, terming them as an “illegal” vehicle for fundraising. The move negatively impacted over a dozen Chinese ICOs, who were forced to shutter their business.
Daisy Wu is among those whose companies have turned to Singapore shortly after Beijing’s ban. “We wanted to avoid legal risks,” she was quoted.
Her company, the Beijing-based Xender, is now trying to raise US$10 million through an ICO for a file-sharing service, the news outlet detailed. Wu confirmed
“Many Chinese companies have gone to Singapore for ICOs…We all want to play it safe.”
The ban came as a serious and surprising blow to all cryptocurrency enthusiasts, with the crypto market experiencing a massive sell-off in the days after the directive. China’s loss was Singapore’s and neighboring Hong Kong’s gain, with significant economic benefits arriving for both cities.
Ben Yates, a lawyer with RPC specializing in fintech and cyber law, said that he has seen significant growth in ICO-related inquiries since September, elaborating,
“It is very likely that the surge in the number of ICO inquiries we have received in the past few months is at least partly a consequence of the restrictions in mainland China…The obvious next step for many Chinese ICO issuers to take is to cross the border. You can still speak Chinese, but you can operate in a more favorable regulatory environment.”
Last year, the South Korea government also banned ICO, forcing local issuers to look elsewhere. They have also reportedly poured into Hong Kong and Singapore recently.
Now according to the latest reports, South Korean companies are also looking for business hubs to relocate to, after the country banned ICO token sales in 2017. With this in mind, Singapore and Hong Kong may see a lot more businesses being set up in the near future.
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