COVID Policies, Not Crypto Bans, Drove Firms Away from Hong Kong

Hong Kong lawmaker Dr. Johnny Ng asserts that the city’s strict COVID-19 policies, rather than China's 2021 ban on cryptocurrency, are to blame for the exodus of crypto firms. As Hong Kong and Singapore compete to be leading crypto hubs, Ng argues that the impact of COVID restrictions was a significant factor in driving businesses away.

Key Takeaways

Dr. Johnny Ng claims COVID travel restrictions, not China's crypto ban, drove companies from Hong Kong.
The strict zero-COVID policy limited business interactions and mobility between 2020 and 2022.
Over half of businesses surveyed considered leaving Hong Kong due to these restrictions.
Competition is growing between Hong Kong and Singapore for dominance in the crypto sector.
Ng, a vocal proponent of Web3, is reshaping the narrative surrounding Hong Kong’s crypto environment.

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

COVID Policies as the Main Factor

During the Consensus HK event on March 24, Hong Kong Legislative Council member Dr. Johnny Ng Kit-chong (@Johnny_nkc) highlighted that the city's stringent COVID-19 policies, not Beijing's 2021 crypto ban, were responsible for companies leaving Hong Kong. He spoke in a video interview hosted by @_dsencil for Bitcoin.com News and emphasized that the long-lasting zero-COVID measures had a greater impact on the business landscape than regulatory actions from China.

From mandatory 14-day hotel quarantines for arrivals to flight bans from major Western nations such as the US and UK, these policies effectively isolated Hong Kong from the global business community between 2020 and 2022.

The Fallout from Zero-COVID Policies

Supporting Ng's argument, data from the Hong Kong American Chamber of Commerce’s 2022 Business Sentiment Survey revealed that over 50% of respondents considered relocating because of the travel restrictions and quarantine mandates tied to COVID-19. Executives cited these limitations—rather than political or regulatory risks—as the main reasons for Hong Kong's decline in competitiveness. High-profile departures included executives from JPMorgan, Citigroup, and Bank of America, while companies like V.F. Corporation moved their operations entirely elsewhere.

For cryptocurrency firms, the inability to easily manage the movement of founders and developers in a city striving to be a global hub disrupted operations more than any regulatory ban from Beijing. Notable companies like FTX relocated from Hong Kong—where they were headquartered before moving to the Bahamas—in response to the restrictions that were in place during the pandemic, not directly due to China's ban.

The Hong Kong-Singapore Rivalry

Ng also pointed out the burgeoning competition between Hong Kong and Singapore as they vie for the title of Asia’s foremost crypto hub. By 2026, Hong Kong aims to have fully opened retail crypto trading, licensed ten virtual asset trading platforms, and established a legislative subcommittee on Web3, which Ng chairs.

In contrast, Singapore has postponed the implementation of Basel Committee crypto banking rules until 2027, granting banks additional time to adjust while attracting institutional investments through its tokenized finance initiatives. Analysts, who initially believed Singapore was pulling ahead due to its crackdown on unlicensed firms, now view both cities as evenly matched, each with its own strengths and both attracting firms leaving Dubai amidst increasing geopolitical uncertainty.

Reconstructing the Narrative

Ng’s participation at Consensus HK is significant. CoinDesk recognized him as one of the Top 50 Most Influential People in Cryptocurrency in 2024, and he has advocated fiercely for Web3 adoption in Hong Kong since 2021. By framing the departure of companies as a consequence of COVID-related measures rather than political repression, he aims to reassure firms that the foundational elements that initially made Hong Kong appealing remain intact following the lifting of pandemic restrictions.