Why is Hong Kong seeing a surge in the crypto "spring tide"? Sun Yuchen and CZ accelerate their return to the East
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Why is Hong Kong seeing a surge in the crypto "spring tide"? Sun Yuchen and CZ accelerate their return to the East
At this week's grand opening of the Hong Kong Web3 Festival, CZ and Justin Sun began their deep involvement.
Navigating Web3 tides with focused insightsWithin a week, multiple cryptocurrency institutions and founders have been precisely targeted by U.S. regulators, making it hard not to suspect that the United States is systematically launching a campaign against the crypto industry—particularly aimed at weakening Chinese influence within the sector.
At this moment, Hong Kong has sent out positive signals. These developments have given Zhao Changpeng (CZ) and Justin Sun, both facing turbulence, new opportunities—and may accelerate their return to Hong Kong.
During the grand opening of the Hong Kong Web3 Festival this week, CZ and Justin Sun began their deep engagement.
The U.S. Regulators Are Declaring War on the Crypto Industry
Since 2023, U.S. regulators have intensified pressure across the entire cryptocurrency industry, with Chinese-linked institutions and entrepreneurs becoming key targets.
Gary Gensler, Chair of the U.S. Securities and Exchange Commission (SEC), has made a forceful move by asserting that existing securities laws "cover most activities taking place in the crypto market." He argues that most cryptocurrencies are securities, meaning foreign entities selling digital assets to U.S. investors must comply with U.S. securities regulations—an effective way to bring nearly all crypto operations involving American investors under U.S. regulatory control.
Under Gensler’s strategy, the SEC has already initiated legal actions against several heavyweight figures and companies in the crypto space.
Behind this declared war lies America's determination to protect the dominance of the U.S. dollar. With high inflation posing the greatest threat to its economy—and historic interest rate hikes failing to curb it—a decentralized cryptocurrency system outside its control has clearly become a thorn in its side.
This explains why U.S. regulators aren't just targeting crypto firms and platforms, but also dismantling crypto-friendly banks. Targeting Chinese-led crypto initiatives serves a dual purpose—one stone, two birds.
This is the terrifying nature of such an open strategy: seemingly rule-based, yet impossible to evade. As one netizen commented, “America’s scythe is truly the sharpest.”
The U.S. crackdown has sparked widespread discontent among industry insiders. "The SEC has completely lost control. The U.S. needs to decide whether it will embrace and support innovators in this country," said Brian Quintenz, current policy director at a16z and former commissioner of the U.S. Commodity Futures Trading Commission (CFTC).
Some domestic institutions haven’t yet been affected but already sense danger. “Other countries won’t wait for us forever,” said Chris Perkins, president of CoinFund, whose words now ring prophetic.
Hong Kong Could Be the Ark
Hong Kong is one region that certainly won’t wait for the U.S.
On October 31, 2022, the Hong Kong Special Administrative Region government officially released its Policy Statement on Development of Virtual Assets in Hong Kong, outlining its policy stance and roadmap for fostering a vibrant virtual asset industry and ecosystem.
This year, Hong Kong’s regulatory bodies have expressed a series of positive and proactive attitudes toward virtual assets, further fueling market enthusiasm.
Public data shows that from last October to the end of February this year, over 80 companies involved in digital assets have expressed interest in entering the Hong Kong market. Among them, 23 crypto firms have already begun operations in Hong Kong, including cryptocurrency exchanges, blockchain cybersecurity firms, blockchain infrastructure providers, crypto wallets, and payment companies.
Undoubtedly, Hong Kong’s reforms in the crypto sector will create more opportunities for enterprises to advance cryptocurrency and blockchain technologies. These reforms will also reinforce Hong Kong’s status as a financial hub, ultimately making it a more attractive destination for investment.
Amid the U.S.’s increasingly erratic regulatory environment, Hong Kong—with its mature regulatory framework, free-market economy, and open international setting—is poised to become the industry’s Noah’s Ark, offering greater certainty and development opportunities for the crypto sector.
Justin Sun believes global crypto regulation swings like a pendulum—sometimes tight, sometimes loose. While the U.S. is moving from leniency to strictness, Hong Kong is shifting from its previous stringent policies toward gradual liberalization. What crypto practitioners need to do is build frameworks capable of adapting to this regulatory pendulum effect.
How OG Justin Sun Is Focusing on Hong Kong Opportunities
Naturally, Justin Sun isn’t missing out on Hong Kong’s opportunities.
On the afternoon of April 11, Justin Sun arrived in Hong Kong as scheduled, warmly welcomed by members of the community. Speaking at that evening’s iPollo Metaverse Goddess Festival, he said it had been many years since his last visit to his homeland, and he could hardly contain his homesickness. He stated he would join fellow Chinese practitioners at the Hong Kong Web3 Festival. As a leading team in the Chinese Web3 space, TRON and Huobi would jointly witness the rise of Eastern crypto power.
Caption: Justin Sun arrives in Hong Kong to attend the Hong Kong Web3 Festival
Justin Sun was among the first major industry figures to publicly support Hong Kong’s “new crypto policies.” Given that compliance is central to Hong Kong’s latest regulatory push, Sun has naturally focused on compliant operations, stating his intention to actively apply for relevant licenses. He hopes to collaborate with the Hong Kong government on stablecoins, NFTs, and exchange businesses.
To this end, Sun has maintained close communication with local officials, including Laurie Lo, Hong Kong’s permanent representative to the WTO, and Mr. Tam Yiu-chung, former member of the Standing Committee of the 13th National People’s Congress, Hong Kong deputy to the National People’s Congress, Secretary-General of the “Hong Kong Reunite Alliance,” Chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, and member of the Legislative Council.
But strength remains the foundation of growth. As one of the most critical infrastructures in the industry, TRON today possesses the capacity to meet Hong Kong’s massive demand. The latest data shows that TRON has surpassed 152 million accounts, recorded over 5.28 billion transactions, and ranks second in total value locked (TVL), trailing only Ethereum.
From a feasibility standpoint, Sun could promote and apply TRON’s public chain technology in Hong Kong, develop and launch more applications and DApps, and enhance public awareness and acceptance of blockchain technology and cryptocurrencies.
Additionally, he could partner with the Hong Kong SAR government and enterprises to explore using TRON’s blockchain technology to solve certain social and commercial challenges—such as digital identity verification and supply chain management. Regarding stablecoin applications, Sun could collaborate with Hong Kong financial institutions and businesses to adopt TRON-based stablecoins as payment methods and store-of-value tools, increasing the usability and liquidity of cryptocurrencies in the Hong Kong market.
For Hong Kong, which aims to develop fintech and become a global center for digital assets, Justin Sun and TRON undoubtedly offer valuable insights.
Sun’s actions reflect the crypto industry’s growing attention and recognition of the Hong Kong market, while also highlighting Hong Kong’s appeal as an international financial center and business hub. Against the backdrop of escalating U.S. crackdowns and mounting challenges for Chinese-led crypto ventures, Hong Kong offers a far more open and inclusive business and policy environment—making it an ideal refuge and springboard for entrepreneurs like Justin Sun.
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