Spartan Capital Believes That China Will Legalize Crypto Eventually

Spartan Capital, the Singapore based hedge fund and its co-founder Kelvin Koh, China will have to legalize crypto exchanges but before that happens, all crypto has to become ‘’a real asset class’’ as we are reading further in the crypto news today.

The Spartan Capital co-founder stated:

 “There is nothing sinister or worrying about this round of crackdown, nor is this the first time it has happened in China,” but “if crypto evolves into a real asset class (many signs point to that), China will eventually embrace it and crypto exchanges will be legitimized. It may take years but it will happen.”

The testing ground for this could become Hong Kong according to Koh who previously spent 18 years as a partner and head of research at the major banking giant Goldman Sachs. Per the reports, the crypto exchanges can apply to be regulated by Hong Kong’s Securities and Futures Commission and this move is called a ‘’seminal moment for financial services in Asia’’ since it points to an increased acceptance of the digital assets as a new type of financial instrument.

China banned all crypto exchanges in 2017 but they never eliminated crypto trading totally. In the meantime, Koh explained that there is a lot of FUD about the China crackdown:

 “Map that with crypto volatility and the Western distrust of the [People’s Republic of China] government and you get some crazy price action.’’

The People’s Bank of China headquarters stated last week that it will crack down the resurgence of illegal activities for cryptocurrencies and cautioned investors not to mix the instruments with blockchain technology. Koh explained that the main reason behind the crackdown on the crypto trading activity may not be China’s national digital currency but only enforcing the capital controls as digital assets are able to avoid the existing restrictions.

Protecting the retail investors from schemes, the more than half o the crypto projects in China turned out to be scams so this led the public to force the government to get involved which makes for a vigilant approach towards the crypto speculation understandable. Koh explained further:

 “Even in the traditional regulated asset management industry, the CSRC (China Securities Regulatory Commission) conducts regular inspections.  A few years ago, fund managers in China were also viewed as crooks by the regulators (until proven innocent) due to their past transgressions.”