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February 21, 2023
Business

Crypto’s eastern push

The global race to become the crypto industry’s hub heated up yesterday when Hong Kong unveiled a plan that would make it easier for retail investors to trade digital tokens. It’s the latest sign that some jurisdictions are seeking to lure crypto businesses even as American regulators crack down on the sector following the collapse of FTX.

Under Hong Kong’s proposed rules, Bitcoin and Ether, the two largest crypto tokens, would be made available to retail traders on licensed exchanges, provided that the platforms make sure their customers have “sufficient knowledge of virtual assets.”

That regulatory loosening is in contrast to what U.S. regulators are doing. Last week alone, the S.E.C. announced three actions involving crypto. Meanwhile, Binance is reportedly considering cutting ties with American business partners, and the lending platform Nexo is leaving the country after reaching a $45 million settlement with the S.E.C. last month.

More companies are threatening to go abroad if the U.S. doesn’t clarify its rules. Brian Armstrong, the C.E.O. of the publicly traded exchange Coinbase, said the “hostile environment” was putting the U.S.’s status as a financial hub at risk, and more crypto companies would look abroad unless a clearer regulatory framework was established quickly. “Congress should act soon to pass clear legislation,” he tweeted. “Crypto is open to everyone in the world and others are leading.”

Armstrong and other industry leaders say Hong Kong, Singapore, Dubai and Europe are all angling to become digital asset hubs by creating a friendlier regulatory environment.

In other crypto news:

The crypto-focused hedge fund Galois Capital, which managed about $200 million in assets last year, said it would shut down, citing FTX’s collapse.
Customers of FTX’s exchange in Japan can now withdraw assets that were frozen after its collapse.
FTX’s former head of engineering, Nishad Singh, is reportedly near a plea deal with U.S. prosecutors. He would be the third senior executive to cooperate with authorities investigating the exchange’s collapse.

“The business model of producing in China and exporting abroad is no longer viable.”

— Hideo Tanimoto, president of the Japanese conglomerate Kyocera. He told The Financial Times that U.S. curbs on tech exports to China had made that country less attractive as a manufacturing hub.

Article source: https://www.nytimes.com/2023/02/21/business/dealbook/soccer-manchester-united-billions.html