Tech companies leave China by the dozens for the more welcoming countries of Hong Kong and Singapore, all because China continues restricting and regulating the growing cryptocurrency industry. Beijing has defined ICO’s as an illegal fundraising tool because they are afraid that cryptocurrency encourage financial crimes such as money laundering, causing companies within the country to look for other place that will allow them to promote and grow their ICO without the fear of legal consequences.
Cryptocurrencies are decentralized digital currencies designed to work as a means of exchange. With them, you can make transactions without middleman or central authority. Cryptocurrency transactions are stored and recorded in public, digital ledger called blockchain. The Blockchain is a new fast-growing technology which enables transparency in the decentralized networks, brings security to the online world and enables faster, easier and more affordable solutions compared to the existing infrastructure in the majority of industries.
A lot of startups use cryptocurrencies to raise funds, and get people to invest in the company. The problem with cryptocurrencies is that a lot of people see it is an illegal form of fundraising because it is unregulated and open to criminal activity.
Singapore and Hong Kong acted on the strict rules of China by making registration and managing of ICO’s easier. “We cannot say Singapore has become an ICO hub yet, as more work needs to be done, but yes, there has been a lot of activity since September last year,” said Anson Zeall, chairman of the Association of Cryptocurrency Enterprises and Startups Singapore in the South China Morning Post.
Singapore has become the third most popular place to launch and an ICO after the United States and Switzerland, all because of the combination of China’s strict rules on cryptocurrencies and Singapore their easy regulation of it.
It’s not only Chinese companies seeking to get away from China’s strict rules in Hong Kong and Singapore. Since the strict rules forming on ICO’s begun in South Korea companies are leaving Seoul as well. Companies in Thailand may also follow their footsteps if the military government there goes ahead with implementing its heavy crypto taxation plans.
Even though right now neither Hong Kong nor Singapore have developed specific rules for raising money through ICOs, a regulatory framework for raising money using digital currency is being established in both.