Simon Ng According to Stephan Lutz, the CEO and CFO of Bitmex, while the United States tightens its grip on the crypto industry, other markets such as Hong Kong, Singapore, and the UAE offer clearer and more commercially viable regulations.
US Crackdown Deters Talent
In a response to CryptokenTop.com News, Lutz praised regulatory frameworks like Hong Kong’s Securities and Futures Commission, which establishes essential standards for the rapidly growing digital asset class.
Addressing the potential impact of the US government’s Operation Choke Point 2.0 on innovation, the Bitmex CEO aligned with crypto supporters who argue that such measures would only drive away talent. Lutz claimed that this crackdown indirectly benefits Hong Kong, which strives to position itself as Asia’s leading crypto industry hub. Additionally, he discussed Bitmex’s product offerings and why the exchange refrains from providing high-risk lending services.
Below are Lutz’s detailed answers to the questions presented via Telegram.
CryptokenTop.com News (BCN): Stephen, it seems that regulators in the US are intensifying their enforcement actions against crypto companies, with allegations of attempts to “de-bank” the industry. Can you shed light on recent developments and explain Operation Choke Point 2.0?
Stephan Lutz (SL): Following months of increasing regulatory scrutiny and legal enforcement against crypto companies and service providers in the United States, known as Operation Choke Point 2.0, we are witnessing the first effects of evasion. Local champions like Coinbase and Gemini have announced plans to expand into offshore markets, signaling their shift in resources to attract international clients, with a particular focus on Asia.
As the US restricts the crypto industry and the EU shows lower user interest combined with a smaller market, Asian markets enjoy a wide customer base and access to services. Consequently, Asia appears to be the promising region in the near to midterm, with certain CIS markets like Turkey and the UAE as the second-fastest-growing segment.
Anticipating heightened competition and embracing forthcoming changes, we remain committed to product innovation and providing the best trading experience for crypto derivative traders.
BCN: The regulatory crackdown on crypto in the US may discourage developers and companies. Do you believe that if enforcement actions continue without regulatory clarity, it could hinder innovation in the country?
SL: Certainly, there is a risk that top talent will relocate to markets offering more regulatory certainty and lower risk, such as Singapore, Hong Kong, Europe, and the UAE.
BCN: Even if some crypto projects wish to relocate, favorable regulations alone may not be sufficient to convince them to move to a different country or jurisdiction. What makes Asian jurisdictions like Hong Kong, Singapore, or Dubai attractive for such companies?
SL: I believe that the Asian digital assets market is poised for a prosperous future, thanks to its supportive regulatory environment, active venture capital market, and diverse talent pool. Markets like Hong Kong, Singapore, and the UAE provide more clearly defined and commercially viable regulations. Moreover, since China is experimenting with central bank digital currencies (CBDCs), Chinese banks in Hong Kong are now actively supporting crypto businesses. From a money manager’s perspective, this indicates that China is preparing for the asset class, making it a much lower risk to allocate funds to than it was six months ago.
Those who have visited Hong Kong recently may have noticed the city’s enthusiasm for Web3. It is positioning itself as the epicenter of the crypto industry in Asia, with a government that embraces blockchain technology and actively competes with other fintech hubs worldwide.
BCN: Given that Bitmex conducts most of its operations in Asia and caters to Asian users, you likely have firsthand experience with regulatory and market conditions in the region. Despite China’s apparent anti-crypto stance, do you believe Hong Kong can thrive as a crypto hub?
SL: Historically, Hong Kong has been a popular breeding ground for crypto innovation and the birthplace of Bitmex itself. We consider the regulatory framework provided by the Securities and Futures Commission as a significant milestone for our industry, as it establishes crucial standards for the fast-growing digital asset class.
On a personal level, I am delighted to witness the administration’s commitment to building a Web3 digital economy, starting with the establishment of clear regulations. We are optimistic that Hong Kong will achieve its ambition of becoming a leading Web3 role model city and potentially serve as the Web3 hub for China in the years to come.
BCN: Bitmex primarily focuses on offering crypto derivatives trading to institutional and professional traders, rather than retail crypto users. What sets your exchange apart in terms of offerings for institutions and professionals compared to other platforms?
SL: Bitmex provides a secure and reliable exchange business without offering high-risk lending services that could potentially jeopardize the organization. We have an active community of experienced traders connected through the Bitmex Trollbox, leading BTC-margined contracts, and one of the fastest API-trading interfaces in the market. Additionally, we are proud to be one of the few platforms that do not engage in artificial volume inflation.
BCN: Cryptocurrency has both financial and non-financial use cases, with applications in various industries. In your opinion, what key points should regulators consider to establish a fair regulatory model?
SL: Unlike the United States, Europe is progressing with a regulatory framework called Markets In Crypto Assets (MICA) for cryptocurrencies and stablecoins that fall outside the scope of existing financial services legislation.
We welcome your thoughts on this interview. Please share your opinions in the comments section below.
Table Of Contents
Frequently Asked Questions (FAQs) about crypto crackdown
What is the Bitmex Group CEO’s perspective on the US crypto crackdown?
According to the Bitmex Group CEO, the US crypto crackdown may drive top talent to markets with more regulatory certainty and lower risk, such as Hong Kong, Singapore, and the UAE. They believe that these markets have clearly defined and commercially viable regulations for the crypto industry.
How does the CEO view the impact of the US government’s Operation Choke Point 2.0 on innovation?
The CEO agrees with many crypto proponents who argue that the crackdown will push away talent and hinder innovation. They suggest that the clampdown indirectly benefits Hong Kong, which aims to become the epicenter of the crypto industry in Asia.
Why does the CEO highlight Asian jurisdictions like Hong Kong, Singapore, and Dubai?
The CEO sees these Asian jurisdictions as attractive destinations for crypto companies due to their supportive regulatory environments, active venture capital markets, and diverse talent pools. They emphasize that regulations are more clearly defined and commercially viable in these markets, making them favorable for crypto businesses.
Can Hong Kong thrive as a crypto hub despite China’s anti-crypto stance?
The CEO believes that Hong Kong has a strong potential to thrive as a crypto hub. They highlight the regulatory framework established by Hong Kong’s Securities and Futures Commission as a significant milestone for the industry. They express optimism about Hong Kong’s commitment to building a Web3 digital economy and becoming a world-leading Web3 role model city.
What sets Bitmex apart in terms of offerings for institutions and professionals?
Bitmex focuses on providing a secure and reliable exchange business for institutional and professional traders. They prioritize safety of assets, offer leading BTC-margined contracts, have an active community of experienced traders connected through the Bitmex Trollbox, and provide one of the fastest API-trading interfaces in the market. They also emphasize their commitment to maintaining transparency by not engaging in fake volume practices.
What key points does the CEO suggest regulators consider to establish a fair regulatory model?
The CEO points out that Europe is progressing with a regulatory framework called Markets In Crypto Assets (MICA) for cryptocurrencies and stablecoins. They propose that regulators should consider adopting frameworks that provide clarity and regulation for the crypto industry, similar to the initiatives taken in Europe, to foster a fair regulatory environment.
More about crypto crackdown
- Bitmex
- Hong Kong Securities and Futures Commission
- Operation Choke Point 2.0
- Crypto crackdown in the United States
- Regulatory environment in Hong Kong
- Markets In Crypto Assets (MICA) in Europe
