Asia promotes crypto clarity amid regulatory uncertainty in the U.S.
High-rise buildings are seen near Victoria Harbour in Hong Kong, China, July 24, 2023. (Photo by Costfoto/NurPhoto via Getty Images)
Costfoto | Nurphoto | Getty Images
Asia is promoting crypto clarity amid regulatory uncertainty in the U.S., and this could make the region more attractive to investors, according to industry observers.
“Cryptocurrency regulations in Asia have moved along faster and with more clarity — green light or red light — than in the U.S.,” said Ben Charoenwong, assistant professor in finance at the National University of Singapore Business School.
“This has made Asia the premiere location for much of fintech innovation,” said Charoenwong.
Earlier this month, Hong Kong officially opened crypto trading to retail investors and upgraded licenses of two exchanges. HashKey and OSL can now expand their business beyond professional investors to now include retail investors.
“It shows that virtual assets are becoming a recognized asset class with a similar regulatory status as traditional asset classes,” said Lennix Lai, global chief commercial officer at crypto exchange OKX.
“This will further boost investor confidence, making Hong Kong more attractive as a potential global virtual asset hub,” said Lai. OKX is applying for a virtual assets trading license in Hong Kong.
Hong Kong and Singapore are both similar in terms of the approach to maintaining very high regulatory standards.
Ong Chengyi
Head of APAC policy, Chainalysis
Last year, Hong Kong said it recognizes “the potential of distributed ledger technologies and Web 3.0 to become the future of finance and commerce” and expects to enhance efficiency and transparency with proper regulation.
Rival regional financial hub Singapore has also been a frontrunner in crypto regulation. The Monetary Authority of Singapore granted Blockchain.com a license in August, an upgrade to the in-principle approval it got in October. Another player Ripple received in-principle approval in June. This means that Blockchain.com and Ripple can provide regulated crypto services in Singapore.
Meanwhile, Thailand and Indonesia have banned the use of crypto for payments, but allows it to be traded as a commodity.
Hong Kong had the opportunity and hindsight to go through the crypto winter and look at what other regulators have done to enhance and roll out its regime.
Janice Goh
Partner at Cavenagh Law
In contrast, Coinbase and Ripple are embroiled in lawsuits with the U.S. Securities and Exchange Commission, which has accused them of securities laws violations. Both Coinbase and Ripple, as well as other crypto firms, have threatened to leave the U.S. in response to the SEC’s crackdown.
Turmoil in the U.S.
To be sure, the sector has been embroiled in scandal and high drama over the past year. In November, FTX filed for bankruptcy while Terraform and its CEO Do Kwon were charged in February for defrauding investors.
Bitcoin has dropped to trade near $28,373, far below its all-time high of more than $65,000 in 2021.
Crypto leaders have slammed the U.S. and its approach to regulation, particularly for a lack of clarity.
In 2020, the SEC accused Ripple and its co-founders of breaching securities laws by selling its native cryptocurrency XRP without first registering it with the SEC. But in July, a landmark ruling determined the token was not, in itself, necessarily a security.
Meanwhile, the SEC sued Coinbase in June, alleging it was operating an unregistered exchange and broker. In the same month, Binance was charged for several securities law violations.
“I think it’s fair to say the U.S. has made it as confusing as possible as to what the rules of the road are for the crypto industry. The SEC has really been at the forefront of that confusion,” Ripple CEO Brad Garlinghouse said in an interview with CNBC in May. He concluded some crypto firms could leave the U.S. for more progressive jurisdictions as a result.
Asia’s regulatory clarity
Across the Pacific, Singapore and Hong Kong offer far more operational clarity for many industry players
“Singapore has the first mover advantage in the Asia Pacific region, including being ahead of Hong Kong. There were no other countries that were so far ahead in having quite an advanced licensing regime,” Janice Goh, partner at Cavenagh Law, told CNBC.
In November, Ravi Menon, managing director of MAS, made it clear that Singapore wants to be a hub for digital assets, but not one for speculating on crypto.
“Hong Kong and Singapore are both similar in terms of the approach to maintaining very high regulatory standards, as well as being very proactive in creating an enabling environment for digital asset businesses,” said Ong Chengyi, head of APAC policy at blockchain analytics firm Chainalysis.
Ong expects Hong Kong to issue more licenses and for more crypto firms to flock to Asia.
In June, Gemini said it will increase its headcount in Singapore and that the city-state will serve as its regional hub, joining Coinbase and Ripple in expanding their Asia operations.
Dado Ruvic | Reuters
Elon Musk’s SpaceX, is initiating a secondary share sale that would give the company a valuation of up to $800 billion, The Wall Street Journal reported Friday.
SpaceX is also telling some investors it will consider going public possibly around the end of next year, the report said.
At the elevated price, Musk’s aerospace and defense contractor would be valued above ChatGPT maker OpenAI, which wrapped up a share sale at a $500 billion valuation in October.
SpaceX has been investing heavily in reusable rockets, launch facilities and satellites, while competing for government contracts with newer space players, including Jeff Bezos‘ Blue Origin. SpaceX is far ahead, and operates the world’s largest network of satellites in low earth orbit through Starlink, which powers satellite internet services under the same brand name.
A SpaceX IPO would include its Starlink business, which the company previously considered spinning out.
Musk recently discussed whether SpaceX would go public during Tesla‘s annual shareholders meeting last month. Musk, who is the CEO of both companies, said he doesn’t love running publicly traded businesses, in part because they draw “spurious lawsuits,” and can “make it very difficult to operate effectively.”
However, Musk said during the meeting that he wanted to “try to figure out some way for Tesla shareholders to participate in SpaceX,” adding, “maybe at some point, SpaceX should become a public company despite all the downsides.”
WATCH: What retail investors should know about OpenAI and SpaceX
The logo for Google LLC is seen at the Google Store Chelsea in Manhattan, New York City, U.S., November 17, 2021.
Andrew Kelly | Reuters
A U.S. judge on Friday finalized his decision for the consequences Google will face for its search monopoly ruling, adding new details to the decided remedies.
Last year, Google was found to hold an illegal monopoly in its core market of internet search, and in September, U.S. District Judge Amit Mehta ruled against the most severe consequences that were proposed by the Department of Justice.
That included the proposal of a forced sale of Google’s Chrome browser, which provides data that helps the company’s advertising business deliver targeted ads. Alphabet shares popped 8% in extended trading as investors celebrated what they viewed as minimal consequences from a historic defeat last year in the landmark antitrust case.
Investors largely shrugged off the ruling as non-impactful to Google. However some told CNBC it’s still a bite that could “sting.”
Mehta on Friday issued additional details for his ruling in new filings.
“The age-old saying ‘the devil is in the details’ may not have been devised with the drafting of an antitrust remedies judgment in mind, but it sure does fit,” Mehta wrote in one of the Friday filings.
Google did not immediately respond to a request for comment. The company has previously said it will appeal the remedies.
In August 2024, Mehta ruled that Google violated Section 2 of the Sherman Act and held a monopoly in search and related advertising. The antitrust trial started in September 2023.
In his September decision, Mehta said the company would be able to make payments to preload products, but it could not have exclusive contracts that condition payments or licensing. Google was also ordered to loosen its hold on search data. Mehta in September also ruled that Google would have to make available certain search index data and user interaction data, though “not ads data.”
The DOJ had asked Google to stop the practice of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
The judge’s September ruling didn’t end the practice entirely — Mehta ruled out that Google couldn’t enter into exclusive deals, which was a win for the company. Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.
Mehta’s new details
In the Friday filings, Mehta wrote that Google cannot enter into any deal like the one it’s had with Apple “unless the agreement terminates no more than one year after the date it is entered.”
This includes deals involving generative artificial intelligence products, including any “application, software, service, feature, tool, functionality, or product” that involve or use genAI or large-language models, Mehta wrote.
GenAI “plays a significant role in these remedies,” Mehta wrote.
The judge also reiterated the web index data it will require Google to share with certain competitors.
Google has to share some of the raw search interaction data it uses to train its ranking and AI systems, but it does not have to share the actual algorithms — just the data that feeds them.” In September, Mehta said those data sets represent a “small fraction” of Google’s overall traffic, but argued the company’s models are trained on data that contributed to Google’s edge over competitors.
The company must make this data available to qualified competitors at least twice, one of the Friday filing states. Google must share that data in a “syndication license” model whose term will be five years from the date the license is signed, the filing states.
Mehta on Friday also included requirements on the makeup of a technical committee that will determine the firms Google must share its data with.
Committee “members shall be experts in some combination of software engineering, information retrieval, artificial intelligence, economics, behavioral science, and data privacy and data security,” the filing states.
The judge went on to say that no committee member can have a conflict of interest, such as having worked for Google or any of its competitors in the six months prior to or one year after serving in the role.
Google is also required to appoint an internal compliance officer that will be responsible “for administering Google’s antitrust compliance program and helping to ensure compliance with this Final Judgment,” per one of the filings. The company must also appoint a senior business executive “whom Google shall make available to update the Court on Google’s compliance at regular status conferences or as otherwise ordered.”
This is breaking news. Check back for updates.
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