COVID Measures, Not China’s Crypto Ban, drove Firms from Hong Kong

Hong Kong lawmaker Dr. Johnny Ng asserts that the city’s stringent COVID-19 restrictions, rather than China's 2021 crypto ban, led to companies relocating from Hong Kong. This viewpoint reshapes the narrative around the city's status as a crypto hub amidst the competitive landscape with Singapore.

Key Takeaways

COVID-19 travel restrictions were the main reason firms left Hong Kong, according to lawmaker Dr. Johnny Ng.
A survey showed over 50% of businesses considered relocating due to these restrictions, overshadowing regulatory risks.
Hong Kong and Singapore are competing to be Asia’s leading crypto hub, each with unique advantages.
Lawmaker Ng emphasizes that the city’s allure for businesses remains intact even after pandemic-related policies have eased.

Hong Kong lawmaker defending city’s COVID-era crypto narrative

The Impact of Zero-COVID Policies

In a statement made during the Consensus HK event, Dr. Johnny Ng Kit-chong (@Johnny_nkc) claimed that the strict COVID policies were primarily responsible for driving firms away, opposing the commonly held belief that the Chinese government's 2021 ban on crypto trading and mining was to blame.

During a video interview with @_dsencil for Bitcoin.com News, Ng emphasized that the prolonged zero-COVID strategy of Hong Kong, which included harsh measures like mandatory 14-day hotel quarantines for international visitors and flight bans from major Western nations such as the US and the UK, effectively isolated the city from the global business community between 2020 and 2022.

The Human Cost of Zero-COVID

Supporting his claims, data reveals that many businesses considered fleeing Hong Kong due to COVID-related travel limits and quarantine rules. According to a 2022 Business Sentiment Survey by the Hong Kong American Chamber of Commerce, over half of the participants expressed intentions to leave the region. Business leaders cited these travel restrictions—rather than political or regulatory risks—as the key issue making Hong Kong less competitive. Significant exits included senior figures from major firms like JPMorgan, Citigroup, and Bank of America, while corporations such as V.F. Corporation fully relocated their operations.

For crypto companies, the inability to freely travel for key personnel like founders and developers was a greater disruption than any regulatory mandate from Beijing. Firms such as FTX, which had its roots in Hong Kong before moving to the Bahamas prior to its controversial collapse in November 2022, exited during peak restriction periods rather than in direct response to China's ban.

Emerging Rivalry: Hong Kong vs. Singapore

Ng highlighted the growing competition between Hong Kong and Singapore for the title of Asia's premier crypto jurisdiction. By 2026, Hong Kong anticipates fully opening retail crypto trading, licensing ten virtual asset trading platforms through its Securities and Futures Commission, and forming a legislative subcommittee on Web3. Ng chairs this subcommittee.

On the other hand, Singapore has postponed the implementation of Basel Committee crypto banking regulations until 2027, which allows banks additional time to adjust while continuing to draw institutional investment through initiatives by the Monetary Authority of Singapore in tokenized finance. Analysts who once thought Singapore would pull ahead after its regulatory clampdown on unlicensed firms are now observing a more balanced competition, with both cities exhibiting unique strengths and attracting firms seeking alternatives to Dubai amid rising geopolitical tensions in the Gulf.

A Lawmaker Rebuilding Perceptions

Dr. Ng’s participation at Consensus HK marks a significant moment. Recognized by CoinDesk as one of the Top 50 Most Influential People in Cryptocurrency for 2024, he has actively championed Web3 adoption in Hong Kong since 2021. His assertion that COVID policy, rather than political issues, was the primary cause of firms leaving the city is a strategic repositioning aimed at reassuring businesses that the fundamental conditions that made Hong Kong an attractive place to operate remain unchanged now that pandemic restrictions have been lifted.