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Crypto groups are taking refuge in Singapore while global regulators take over

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Global cryptocurrency groups are expanding their presence in Singapore, attracted by the city-state’s friendly regulatory environment while other markets are taking over the industry.

Among the leaders to move to the Asian financial center are Changpeng Zhao, founder of Binance, a cryptocurrency exchange that processes trillions of dollars in trading annually. Gemini, a U.S. exchange founded by the Winklevoss twins, is also increasing its number of people in Singapore.

The city has not yet issued licenses to cryptocurrency companies, but has granted exemptions to some of the industry’s largest players, allowing them to serve local and institutional investors.

While growth in the cryptography industry has been overloaded this year, regulators in the markets included the United States, United Kingdom, and China they have captured the sector. Hong Kong, a rival Asian financial center, is destined to limit the crypto trade to accredited or institutional investors under a new law.

Singapore has been much more welcoming. The GIC Sovereign Wealth Fund and the Temasek State-backed investment company have spent hundreds of millions of dollars investing in the sector. The Singapore Monetary Authority has made it easier for foreign cryptocurrency groups to create and service residents, albeit with restrictions including limits on transactions. Singapore Exchange has introduced two cryptocurrency indices.

“Crypto bros around the world have read the writing on the wall and realize Singapore Inc embraces the asset class,” said the founder of a city-based crypto start-up.

Binance received a licensing franchise in Singapore and announced more than 200 jobs located in the city on LinkedIn last month. Vitalik Buterin, the founder of cryptocurrency Ether, is also based here.

Binance billionaire founder Changpeng Zhao is a Singapore resident © Reuters

OSL, a Hong Kong-based exchange, has also been granted a franchise license and plans to double its number by the end of the year.

“The first deciding factor when thinking about where to place your operations is regulation. Singapore is clear and precise about how it deals with the cryptocurrency and digital asset markets,” said Kanny Lee, head of the office. of OSL in Singapore.

Gemini, founded by Cameron and Tyler Winklevoss, has chosen Singapore as its Asian headquarters and expects to have about 50 employees by the end of 2021, compared to just one when it launched the office in June last year. .

“Singapore is a major financial center in Asia with a good group of clients, especially in the private wealth space. We have had conversations with wealth management companies that many of them require cryptographic solutions,” he said. said Jeremy Ng, Gemini’s general manager for Asia.

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Jihan Wu, the billionaire co-founder of Chinese mining cryptography Bitmain technology group, has launched a crypto startup in the city.

The MAS said about 40 per cent of candidates under the Singapore Payment Services Act wanted to provide digital payment token services but there had been no “significant pick-up” in the applications “attributed” directly to actions taken by other countries “.

Chia Hock Lai, president of the Blockchain Association of Singapore, said there were a number of Hong Kong-based players setting up offices in the city. Hong Kong legislation that would limit trading to accredited investors “says” its position on digital currencies, he said.

Meanwhile, Singapore’s economy depends heavily on services like this trade in goods and financial transaction.

“Without a natural resources industry to rely on Singapore you might not risk being too hostile to an industry that could be a big winner in attracting talent and business,” said Daniel Burke, CEO of Singapore for the custodian of cryptocurrency BitGo, adding that if Singapore failed to get the right framework, it could starve the city of much-needed future ventures.

However, some industry figures said that a lack of clarity on when MAS approved licenses became problematic. “We have a few potential customers who say they won’t deal with us until we have a proper license,” one candidate said. “Unfortunately, there’s no sense of when that will happen either.”

More information from Stefania Palma in Singapore

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