BlocksInform
The collapse of the industry last year has plagued Asian companies as they carefully plan for recovery. In the past, China was a hotbed for the exploitation and trade of cryptography. Even after announcing a blanket ban on all activities related to digital assets over a year ago, there is reason to believe that Canada could make a strong comeback in this area.
Tron founder Justin Sun, who has a history of hyping the industry, also said China could embrace the asset class, especially after the implementation of a tax on crypto transactions, which he considers to be “a big step toward cryptocurrency regulation.”
Taxing Crypto
Some Chinese authorities have started levying a 20% personal income tax on the investment profits of individual crypto investors and Bitcoin miners. In an attempt to control the cryptotax, many think that China might eventually legalize the asset class.
Cryptographic activities are illegal, interfering with tax policies. This has been the case in the past. A few months after the ban, a subsidiary of the National Tax Administration in China published a paper on the prevention of tax risks associated with virtual currencies.
In fact, Chinese blockchain reporter Colin Wu said Huobi and other exchanges provided information to the Chinese tax authorities in January 2022 before it was acquired by Sun.
Other than the FTX meltdown, Policy makers in East Asia have voiced strong concerns such as the wasted energy footprint of crypto mining and the dangers of speculating on volatile assets. Cryptographic activity has slowed to a large extent, but is by no means dead, suggesting that Beijing's trade restrictions have been largely circumvented by identified users.
Chainalysis’ revealed that China jumped up to 10th place in 2022 in the company’s Global Crypto Adoption Index after noting a strong usage of centralized services. It shows that the government has "been ineffective or misapplied".”
Hong Kong and Singapore Cryptographic Regulatory Position.
The Chinese ban on cryptography has raised concerns about a knock-on effect. But Hong Kong is making its way to Singapore.
Hong Kong welcomed crypto companies in an attempt to maintain its status as a global financial center with regulatory clarity in place. Virtual asset service providers looking to operate in the region will have to undergo a licensing procedure complying with AML guidelines and investor protection laws.
Hong Kong’s Securities and Futures Commission (SFC) will soon publish a list of crypto assets open to retail traders to limit retail investors to a few whitelisted cryptos.
Meanwhile, regulations in Singapore are expected to get more stringent for existing market players, especially after the high-profile implosion of firms registered in the city-state, such as Three Arrows Capital (3AC) and Terraform Labs.
