After China’s ICO ban in September 2017, it seems that Hong Kong and Singapore have become the new destinations for all those companies that want to raise funds using blockchain technology.
ICO (Initial Coin Offering) is a fund-raising mechanism based on digital tokens. On the one hand, the project proposes its idea to the market, creating and selling its token, and on the other an investor can choose whether to buy this token to use it in the project itself (buy/sell products and/or services) or keep it as an investment.
The digital token, once it has become currency, will then be listed on the Exchanges, through which it will be possible to make crypto-trading.
Said this, a project, therefore, looks for a “safe haven” to set up its own ICO and, just in September 2017, it seems that companies and investors flow has settled in Hong Kong and Singapore.
Hong Kong, the former British colony runs on a legal system different from mainland China and remains open to cryptocurrency trading. Ben Yates, a lawyer with RPC specialized in fintech and cyber law, estimated that from September 2017 until today, there has been a significant increase in ICO-related transactions, reaching a daily rate.
“It is very likely that the surge in the number of ICO inquiries we have received in recent months is at least partly a consequence of the restrictions in mainland China … The obvious next step for many Chinese ICO issuers is to take is to cross the border . You can still speak Chinese, but you can operate in a more favourable regulatory environment. “
Singapore, according to a report from Funderbeam, last year, it became the world’s third largest ICO launch platform, after USA and Switzerland, in terms of money raised, and the world’s first largest remaining in the Asian market.
Anson Zeall, chairman of the Association of Cryptocurrency Enterprises and Startup Singapore, stated as follows:
“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”
Also Zeall refers on September growth, just after the China’s ICO retreat, with Beijing which defined an ICO as an illegal fund-raising tool, a financial fraud and money laundering.
Generally, in the Asian world, we also find other countries like Japan, Taiwan and many others favouring ICOs, but Hong Kong and Singapore receive more interest because they also are houses of many financial institutions that can serve as potential investors for ICOs, they don’t impose capital gains taxes and provide a vibrant cryptocurrencies community, without any language barrier, with easy transport to the rest of the world!
Among the various ICOs who have moved out from China after september, we find Daisy Wu. Wu’s company, Beijing-based Xender, is now trying to raise $10 million through an ICO for a file sharing service, detailed newsletter.
“We wanted to avoid legal risks … Many Chinese companies went to Singapore for ICO … We all want to play on the safe side.”
Together with China, on same September 2017, we find another country who had also banned ICOs, South Korea, with the same consequences of forcing local issuers to look elsewhere.
The South Korea’s ban seems not to be as sharp as it seems, in fact there are no legal bases that define it. In any case, even Koreans are moving towards our safe ports.
Recently, local media reported that Bithumb, one of South Korea’s largest cryptocurrency Exchange, plans to launch a “Bithumb Coin” ICO through a Singaporean company and also another Korean start-up, Zikto, is preparing an ICO in Singapore.