Hit by cryptocurrency curbs, Chinese fund managers look elsewhere to ride bitcoin bull


In this news, we discuss the Hit by cryptocurrency curbs, Chinese fund managers look elsewhere to ride bitcoin bull.

SHANGHAI / HONG KONG (Reuters) – As the price of bitcoin skyrockets, Chinese cryptocurrency asset managers are looking to expand in places such as Hong Kong and Singapore, bypassing an intensified crackdown at home.

Cryptocurrency-focused hedge funds have increased their assets under management and made significant gains this year thanks to Bitcoin’s recent surge to over $ 18,000, near its peak in 2017.

At the same time, Beijing has tightened its already tight control over cryptocurrencies as the People’s Bank of China (PBOC) prepares to launch its own digital currency, in part in response to the threat from currencies like bitcoin, according to officials.

Beijing banned virtual currency trading in 2017, shutting down an emerging freewheeling crypto industry and dropping China’s share of global bitcoin trading to less than 4%, from nearly 17% in 2017, according to CoinShare, Europe’s largest digital asset manager.

Therefore, Chinese businessmen are looking elsewhere to raise crypto-focused funds, following the path of some of the world’s largest crypto trading platforms that were founded in China but have moved overseas. in 2017.

This month, Babel Finance, a Hong Kong-based cryptocurrency financial services provider founded by Chinese entrepreneur Flex Yang, applied for a license to manage assets in the city, Yang said.

A license in the Asian financial hub would help Babel become a “bridge” between traditional financial institutions and crypto investing, said Yang, who dreams of creating “the JPMorgan in cryptocurrency.”

If Babel is licensed, Yang hopes to raise $ 1 billion, eclipsing existing funds in the city licensed under special rules for crypto-focused asset managers.

Gordon Chen, a former bitcoin trader in Beijing, co-founded cryptocurrency asset manager GMR in Singapore last year, betting on growing demand from high net worth individuals and institutional investors.

Chen, who currently manages over $ 20 million in Bitcoin assets, said he chose Singapore because of its regulatory structure. “Whether in the United States or Singapore, digital currency trading is increasingly regulated.”

Singapore-based custodian Onchain, which counts Chinese conglomerate Fosun as an investor, is also growing, even in China.

The company, which protects digital assets for institutional clients, plans to open an office in China to provide blockchain technology consulting services as a first step

However, activities on land are still limited by regulations.

In October, the PBOC banned the private issuance of digital currencies, and the Malta-based OKEX exchange was forced to suspend cryptocurrency withdrawals for a month because an executive was helping the forces of the Chinese orders in their inquiries.

GMR’s Chen lamented that China has lost its global pricing power, as well as its role as a key hub for bitcoin trading and mining, “The first-mover advantage of the China is gone.

Reporting by Samuel Shen and Alun John; Edited by Shri Navaratnam

Original © Thomson Reuters Corporation

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