Hong Kong and Singapore have emerged as the leading cryptocurrency hubs in Asia, attracting numerous international crypto firms to set up their operations in both cities.

One such example is Amber Group, a digital asset firm with a multi-billion dollar valuation that is headquartered in Singapore but maintains a significant presence in Hong Kong. According to Annabelle Huang, the managing partner of Amber Group, the company is preparing to apply for Hong Kong's new virtual asset trading platform (VATP) license, demonstrating its commitment to both markets.

While Hong Kong is currently leading the way, Huang emphasized that both markets are equally important for the firm. She also noted that Singapore is not closing its doors and remains a strong contender in the competition for the title of Asia's crypto capital.

Contrasting Retail Trading Regulations in Two Major Crypto Hubs

The divergent regulatory approaches to crypto assets in Singapore and Hong Kong are becoming increasingly apparent.

Singapore initially attracted crypto businesses with its lenient licensing regime. However, the Monetary Authority of Singapore (MAS) has recently adopted a more stringent stance towards trading platforms.

In particular, MAS has prohibited crypto exchanges from advertising their services to the public and has issued multiple warnings to individual investors about the volatility of cryptocurrency assets.

This year, MAS proposed additional regulations that may limit retail investors' access to certain crypto offerings. The proposed regulations would prohibit investors from borrowing money to purchase cryptocurrencies and restrict companies from loaning or staking their currencies for returns.

Despite the different regulatory approaches, both Singapore and Hong Kong remain attractive destinations for cryptocurrency firms.

In Singapore, while the Monetary Authority of Singapore has tightened regulations for trading platforms and cautioned individual investors about cryptocurrency's volatility, interest in digital assets remains high.

Hong Kong, on the other hand, has created a regulatory framework that allows crypto exchanges to operate with the VATP license. Instead of banning specific activities, the new regime requires exchanges to register with the Securities and Futures Commission and provide stronger safeguards for retail investors.

With the new VATP laws, retail trading platforms must conduct onboarding procedures to evaluate individuals' risk profiles and perform strict token due diligence to ensure stronger protection for investors.

Although Singapore and Hong Kong may attract the most attention as Asia's leading crypto hubs, other markets in the region are also developing their own cryptocurrency scenes.

Last year, Amber Group entered the Japanese market with its acquisition of the cryptocurrency exchange DeCurret. However, the firm is currently focused on serving institutional clients and may sell DeCurret to a potential buyer.

Despite this, Amber Group is not planning to exit the Japanese market. According to Huang, "Japan is still booming, especially in terms of the different Web3 applications that are coming out of it."

While Japan's strict regulatory environment for crypto exchanges has made it difficult for businesses to turn a profit, advocates argue that the country's approach works. For example, FTX Japan has been able to allow its users to withdraw all their fiat and crypto funds, even as the platform's customers elsewhere may never be able to recover their assets.

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Source: beincrypto

image Source: binance

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Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.