Token sales ban in China and South Korea is perhaps turning into a blessing in disguise for Singapore and Hong Kong, where the number of initial coin offerings has skyrocketed in recent months.
The phenomenal increase in the number of companies launching ICOs in the Chinese self-administered territory and Singapore is attributed to a favorable environment they provide to companies that seek to raise funds outside their home countries.
Neither of these East Asian countries impose capital gains taxes, making it easier for ICO issuers to attract investors, according to fintech businesses, lawyers and industry groups.
Both provide a vibrant cryptocurrency community without language barriers and easy transport routes to the rest of the world, South China Morning Post reported.
In September last year, the Chinese govrnment had termed ICO as an illegal fundraising tool after concerns over financial scams and money laundering. Unable to continue any new fundraising activities folowing this ruling, dozens of ICO platforms in the country were forced to shut down, with many of them migrating abroad.
SCMP quoted Ben Yates, a fintech lawyer, as saying that the obvious next step for many Chinese ICO issuers to take is to cross the border, where "You can still speak Chinese, but you can operate in a more favourable regulatory environment."
South Korea also made a similar restriction at the same time China banned ICOs.
China has been the ICO hub of the world until the ban was imposed.
Last year, Singapore became the world's third-largest ICO launch pad in terms of money raised, after the Uni444.ed States and Switzerland.
Hong Kong runs on a legal system different from mainland China and remains open to cryptocurrency trading.
However, the former British colony is vigilant over fraudulent digital coin trading. Its Trading Regulator last month clipped the wings of an Initial Coin Offering (ICO) over non compliance with local regulations.
by Joji Xavier
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