Hong Kong and Singapore are two of Asia’s foremost centers for cryptography. In recent years, a large number of international crypto firms have established themselves in both cities.
As one example, the Singapore-based multibillion-dollar digital asset giant Amber Group has never forgotten its Hong Kong beginnings.
Annabelle Huang, a managing partner of Amber Group, stated in an interview with Bloomberg that the company maintained one of its largest facilities in Hong Kong. Additionally, it intends to submit an application for the city’s new virtual asset trading platform (VATP) license.
Huang stated, “for us, the two markets are of equal importance” in reference to the crypto landscapes in two of Asia’s most prominent crypto centers. She elaborated by saying, “Hong Kong is sort of leading the way at the moment, but Singapore is not exactly closing the door.”
Singapore and Hong Kong’s regulatory approaches to crypto assets differ significantly. Initially, Singapore attracted crypto firms with its lenient licensing requirements. In recent years, however, the Singapore Monetary Authority (MAS) has adopted a much stricter stance on trading platforms.
The MAS has specifically prohibited crypto exchanges from marketing or promoting their services to the general public. Additionally, it has repeatedly issued warnings to retail investors about the volatility of crypto assets.
This year, the MAS has proposed additional restrictions on retail investors’ access to specific crypto offerings. These restrictions would prohibit investors from using credit to finance cryptocurrency purchases. In addition, they would prohibit companies from lending or pledging their currencies to generate returns.
Nonetheless, despite the somewhat authoritarian posture of the financial regulator, crypto remains popular in Singapore.
Hong Kong has devised a regulatory pathway for crypto exchanges to open shops with the VATP license. Instead of prohibiting specific activities outright, the new regime will require exchanges to register with the Securities and Futures Commission (SFC).
Under the previous framework, only professional investors could be served by SFC-licensed platforms. Without a space for retail crypto trading within regulated entities, individuals frequently resort to unregulated platforms.
In lieu of a prohibitive approach, the new VATP regulations will require retail trading platforms to implement enhanced security measures. These will include induction procedures that evaluate the risk profiles of users and stringent token due diligence requirements.
