Hong Kong Will be the Launcher for Next Crypto Bullish Market

"The next bullish market for cryptocurrency will begin in the East."

Many 'big players' in cryptocurrency marekt have pointed out that the opposite policies for cryptocurrency acceptance between the East (Asia) and the West (US) will be represented as the result of next bull market.

Cameron Winkleboss, co-founder of the cryptocurrency exchange Gemini, recently tweeted, "We know that cryptocurrency has become a global asset group and is an unstoppable trend. If we do not provide a clear regulatory system, the U.S. government will disappear into the dust."

In addition, Brooks Entwistle, senior vice president of global customer success of Ripple, pointed out unilateral regulation of an U.S. government in an interview with cryptocurrency media Forcast, saying, "Asia such as Hong Kong is leading cryptocurrency regulations."

The U.S. entered strict regulations last year, culminating in the collapse of Defi platforms and the bankruptcy of the FTX.

In fact, the U.S. Securities and Exchange Commission (SEC) and U.S. financial authorities have recently been pressuring the cryptocurrency industry with strong regulations, such as prosecuting cryptocurrency companies and tightening custodial regulations.

On the other hand, Hong Kong, which announced in October last year that it would be reborn as a cryptocurrency hub, started to accept the cryptocurrency industry in earnest.

The U.S., which is tightening regulations, and China, on the other hand, is opening the door to the cryptocurrency market again through Hong Kong. Those who are working in the U.S. cryptocurrency industry pointed out the current status. Cryptocurrency supremacy is changing.

# The U.S Launching Strong Regulations Made the Cryptocurrency Breaking Away

Since late last year, the U.S. has started intensive regulations, calling for the completion of the integrated regulation plan for cryptocurrency market.

As U.S. regulators, led by the U.S. SEC, tighten the reins on the cryptocurrency industry, the U.S. market is facing growing regulatory concerns are growing. On the 9th of last month (local time), the SEC imposed a $30 million fine on the global cryptocurrency exchange Kraken on charges of selling and providing unregistered securities by its staking service. In addition, the SEC is increasing regulatory pressure by disclosing strengthened standards to allow cryptocurrency entrustment only for managers who are qualified as registered investment advisors.

It wasn't just the SEC. The New York Financial Services Agency (NYDFS) ordered Paxos, a stablecoin issuer, to stop issuing BUSD, Binance's stablecoin.

The problem is that such tightening of regulations has begun to put enormous pressure on market players beyond giving clarity in the market. As a result, cryptocurrency companies are withdrawing services from the United States.

In December last year, cryptocurrency loan platform Nexo announced that it would gradually suspend products and services in the U.S. due to regulatory problems with the SEC.

Financial authorities' regulatory pressure affected not only cryptocurrency companies but also investors. Intense regulations have begun to dampen investment in cryptocurrency.

A total of $32 million was leaked from cryptocurrency investment products last week as U.S. financial authorities put regulatory pressure on the cryptocurrency industry, including stablecoin.

# "Hong Kong" Launches a New Fire With the Support of the Chinese Government

Hong Kong, which has been moving to accept the cryptocurrency industry since last year, has decided to fully open the cryptocurrency market from June.

Hong Kong introduced a thorough licensing system under the jurisdiction of the Hong Kong Securities and Exchange Commission (SFC) and announced the launch of a system to manage and supervise the cryptocurrency market.

Since then, Hong Kong's parliament has been speeding up preparations for opening the cryptocurrency door by passing the AMLO amendment to the Anti-Money Laundering and Anti-Terrorism Funding Ordinance (AMLO) in December last year.

Through the revision, which will be introduced on June 1, Hong Kong's SFC will start a virtual asset business (VASP) license system. The license plans to allow retail investors to trade cryptocurrency through qualified cryptocurrency exchanges.

The industry predicts that the Hong Kong's move shows the Chinese government's duplicity of cryptocurrency and can expect changes in the Chinese government's cryptocurrency policy in the future.

As a basis for this, a number of reports have recently been circulating through the media that the Chinese government is supporting the ambition of Hong Kong's cryptocurrency hub.

Bloomberg quoted a source on the 21st of last month and reported, "Since October last year, the Hong Kong government has expressed its intention to become a cryptocurrency hub, creating an environment for Chinese cryptocurrency companies to return to Hong Kong." Bloomberg judged that not only the Hong Kong government's cryptocurrency-friendly move would be possible with the support of the Chinese government, but that the Chinese government was using Hong Kong as a test site for cryptocurrency transactions.

Justin Sun, founder of TRX, expressed the same idea. In a recent interview with CoinDesk, he said, "Beijing, China, sees Hong Kong as an experimental area for cryptocurrency regulation," adding, "If Hong Kong's feedback is positive, China's policy can also be changed."

# Hong Kong, Global Cryptocurrency Capital Stockpile

Hong Kong, which announced a reopening with the support of the Chinese government. Crypto funds from all over the world have been flocking into Hong Kong.

Ahead of the start of full-scale licensing of cryptocurrency companies from June, Chinese cryptocurrency exchanges such as Huobi, OKX, and Bitget also announced that they are speeding up their entry into Hong Kong.

"Currently, the Hong Kong government is taking a very transparent and flexible way to discuss cryptocurrency regulations with market participants," founder Justin Sun said. "Huobi will apply for a VASP license in Hong Kong and launch 'Huobi Hong Kong' after approval."

The exchanges are reportedly preparing to apply for licenses with a dedicated team to respond to the Hong Kong regulatory process.

Last week, Singapore's largest bank, DBS, also announced its entry into the Hong Kong cryptocurrency market, and the Hong Kong cryptocurrency market, which will reopen, is expected to become a hub for huge capital around the world, including China.

In the past, China played a leading role in leading the cryptocurrency market in name and reality, focusing on mining. As Arthur Hayes, CEO of Bitmax, pointed out, "China did not leave the cryptocurrency, but was just a sleep for a while," China seems to be returning to cryptocurrency after a long sleep.

The different stories and the conflicting moves of the two countries accordingly could change the cryptocurrency hegemony again. The next wave of cryptocurrency bullish markets could be caused by Asia.

권승원 기자 ksw@