A spate of crypto probes in the US is prompting battered digital-asset firms to look toward financial hubs overseas, clouding the country’s position as a cornerstone of the industry. Singapore, Hong Kong, Europe and Dubai are more enticing for cryptocurrency companies thanks to their regulatory efforts, tax advantages and friendlier governments, according to interviews with more than a dozen executives, former regulators, investors and analysts. Managers decried what they called “regulation by enforcement” in the US, which has seen authorities crack down on rule-bending activity rather than come up with new laws specifically tailored to digital assets. “Given the increasing level of regulatory scrutiny and enforcement we have seen, several US crypto investors are growing a bit nervous,” said Zhuling Chen, the chief executive officer and founder of Singapore-based staking firm RockX, who’s been fielding calls from investors including hedge funds, mutual funds and small centralized exchanges. “Whoever has interest and wants to stay in crypto will choose friendlier countries, where the rules are clear.” In just over a week, there’s been a burst of enforcement by the US Securities and Exchange Commission. The watchdog announced a $30 million settlement with crypto exchange Kraken on Feb. 9, ordering the company to suspend its so-called staking services.
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