Xapo moving to Switzerland due to ‘opaque’ HK regulations

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Xapo, a wallet provider that allows for cold storage of cryptocurrencies, has announced the moving of its main operations to Switzerland, from Hong Kong at present.

According to Swissinfo.ch, Xapo President Ted Rogers said the company was drawn to Switzerland due to its regulatory environment that was more conducive to business.

“It was once thought that Hong Kong was the holy grail of crypto regulations… But it has become more opaque,” he said.

The article did not cite specific actions the Hong Kong government has taken, but last November, the Hong Kong Securities and Futures Commission outlined new regulatory standards for cryptocurrency-related businesses, wherein the definition of futures contracts and securities is expanded to include virtual currencies.

In explaining the move to Switzerland, Rogers said, “It’s a reality of this industry that you have to be agile and react to regulatory changes all the time. Swiss regulators are smart, interested and sophisticated in dealing with the financial markets.”

Xapo has had a Switzerland office since 2015, being one of the first cryptocurrency firms located in Zug, known to many as ‘Crypto Valley’ for the number of blockchain enterprises setting up shop in the city.

The Swiss government has shown a commitment to make the country a hub for technology companies, amending legislation as necessary to recognize blockchain and cryptocurrencies as having a distinct category, in order to reduce certain requirements when appropriate.

Switzerland’s postal service, Swiss Post, has partnered with government-owned telecommunications firm Swisscom in launching a 100% Swiss-owned blockchain infrastructure for the country’s public and private sector to put up applications.

Rogers said, “Nothing has changed my belief that Switzerland is the right place for a blockchain or crypto project… It’s everything that the US was designed to be, but actually lives up to it.”

Still, some coordination is required among agencies and officials, as just two months ago, the Swiss Financial Market Supervisory Authority (FINMA) gave banks an order to treat crypto assets as of much greater risk than traditional instruments.

Rogers cited the company’s past experience creating its own debit card line, which Visa stopped last year. According to Rogers, there were lessons learned, and now applicable in current plans for region-specific Visa and Maestro cards.

Even the current dip in cryptocurrency prices and investor sentiment has not fazed Rogers, who said the company was capable of maintaining operations. He noted that even with reduced transaction volumes, many clients were keeping their digital assets in Xapo’s vaults.