HK Attracts Web3 Businesses Due to U.S. Crypto Regulators

Industry experts believe Hong Kong’s changing stance on blockchain technology, cryptocurrencies, and Web3 could lure businesses away from the U.S.

In the past year, the city has taken several steps to promote the growth of the Web3 sector and facilitate retail investment in cryptocurrencies. The most recent instance of this is the organization’s Task Force on Promoting Web3 Development.

Yat Siu, the co-founder of Web3 investment firm Animoca Brands, is one of fifteen industry experts invited to serve as advisors to the task force, which will interact directly with high-level government officials and financial regulators.

Siu emphasized Hong Kong’s progressive shift in attitude toward cryptocurrencies and Web3 over the past few years, which places the city in a unique position to attract entrepreneurs and established companies to its jurisdiction.

While conceding that the United States should not be “written off” in the Web3 race, Siu stated that many firms in the industry operate “under a regime of fear” due to a lack of regulatory clarity.

In recent months, the U.S. Securities and Exchange Commission (SEC) has filed separate complaints against Binance.US and Coinbase for a variety of purported unregistered securities offerings in Hong Kong, according to Siu, has recognized an opportunity to assume a leadership role in Web3 development, while the United States itself has sabotaged’ its potential as a prominent location for companies in the sector:

“The SEC doesn’t seem to be wanting to be consistent about this, in contrast to Hong Kong, or other jurisdictions like Japan, the Middle East or even Europe which have rules that are starting to become consistent.”

Hong Kong also kept a distance from the cryptocurrency space for some years, with restrictive policies prohibiting retail investment in cryptocurrencies only recently repealed after extensive consultation with industry advocates.

Siu stated that the government had shown ‘agility’ in its altering posture towards the cryptocurrency industry, given that it had not always been receptive to cryptocurrency companies.

Hong Kong’s Web3 task force is likely to have a relatively fluid structure. Siu anticipates monthly or quarterly meetings with a variety of Hong Kong-based crypto, blockchain, and Web3 working groups.

The group has yet to hold its first meeting. Members of the Web3 task forces have engaged in a two-year agreement with the Hong Kong government and will guide methods to promote the industry’s expansion.

Siu envisions the task force advancing the sector by cultivating talent and encouraging institutions of higher education to investigate blockchain-based solutions:

“I think it’s a great way in which we could build a closer relationship with the government and also sort of push forward the Web3 adoption agenda.”

As previously reported, Hong Kong’s efforts to ignite the Web3 sector have attracted over 150 Web3 firms to the city’s Cyberport this year, and companies are reportedly spending between $2 and $25 million to obtain licenses to operate in the city.