Hong Kong and Singapore, as leading global financial centers, have both taken steps this year to regulate cryptocurrency and have implemented clear compliance policy guidelines. However, why did Sora Ventures, a cryptocurrency fund managing over $70 million, choose Taiwan as its preferred location among many other advanced countries? How does Jason Fang, a partner at Sora Ventures and a Bitcoin OG, view the future of Bitcoin?
Singapore: Considering Realistic Benefits of Cryptocurrency Industry Cluster
Hong Kong: China’s Cryptocurrency Free Port
VCs in Taiwan Thrive Unlike Exchanges
Taiwan is a Noise-Free Environment
“If we were in Singapore back then, we would have been cut off by FTX…”
Bringing More Energy to Taiwan
Market Commentary: “Buy the rumors, Sell the news”
As one of the early venture capital funds in Asia to invest in blockchain technology and digital assets, Sora Ventures has successfully maintained stable growth despite the ups and downs of the Web3 wave, from the bear market in 2018 to the collapse of LUNA last year, and the fall of the cryptocurrency exchange FTX. In December last year, Sora Ventures decided to relocate its business to Taipei and established its headquarters in Taipei 101 in September this year. Among cities such as Hong Kong, Singapore, and South Korea, why does Sora Ventures favor Taiwan? Jason Fang, the invited partner and co-founder of Sora Ventures, shares his perspective and experience from the venture capital standpoint.
Sora Ventures headquarters located in Taipei 101
Since 2016, Singapore, as a leading traditional financial center in Asia, has been the first to introduce regulatory sandboxes for financial technology innovation and has begun experimenting with cryptocurrency applications. With the introduction of the Payment Services Act (PSA) at the end of 2019, which was warmly welcomed by global exchanges at the time, Singapore seemed to be leading the race in the cryptocurrency industry. Regarding early regulatory measures in Singapore, Jason said:
As Singapore gradually solidifies its position in the Asian cryptocurrency ecosystem, Jason points out that the current choice of Singapore is not only due to its policy advantages but also because of the realistic benefits. Due to the industry cluster, Singapore has become an ideal place for those who want to enter the Web3 industry, along with the advantage of its small size and dense population, which allows people to connect with each other in a short period of time.
This year, with the support of the Beijing government, various new cryptocurrency policies have been centered around Hong Kong. The Hong Kong government also aims to build it into a leading global digital asset and digital finance center. At the beginning of the year, the Web3 base “Cyberport” was established with great fanfare. On June 1 this year, Hong Kong began accepting applications for virtual asset trading licenses, and HashKey Exchange officially obtained a license on August 3.
However, Jason holds a different view on the recent regulatory developments in Hong Kong. Although these policies seem to be aimed at promoting Hong Kong as a global leader in digital assets and digital finance, in reality, they may not fully address the diversity and transparency issues in the market.
Jason believes that the Chinese government clearly understands that blockchain technology is an important trend for the future. In the process of promoting entrepreneurship and innovation, even President Xi Jinping himself has emphasized the potential and importance of blockchain technology. The government recognizes the value of private chains and attaches particular importance to the potential of public chains, considering them to be much more valuable than private chains. In fact, companies applying public chain technology have already emerged in various fields, including Web2, traditional finance, and other industries.
From a practical perspective, Jason points out that the Chinese government is facing a dilemma. They do not want the mainland Chinese population to be excessively involved in understanding and using Bitcoin or other cryptocurrencies. Therefore, guiding mainland Chinese companies to Hong Kong is the only option to maintain national stability.
“VCs have opposite expectations from exchanges.” Jason said that from the perspective of venture capital, although Taiwan’s regulations are not completely open, and in certain aspects, such as the legal framework related to exchanges, a complete framework may not be established, Taiwan is a free country. This freedom is attractive to venture capital firms because, compared to the strict regulations required for the public or exchanges, VCs prefer an environment without government intervention.
Exchanges expect to operate in an environment with clear laws and regulations to protect their employees, products, companies, and assets. Such an environment can help them rapidly expand their scale. However, it is also curious how the well-regulated Singapore government affects VCs.
Jason tells readers that during the FTX collapse last year, not only did the Singapore government stumble, but the entire cryptocurrency ecosystem in Singapore was also caught in a storm. At that time, due to the close relationship between the Singapore government and the US government, the positive evaluation and promotion of the FTX platform by the SEC did influence Singapore’s policy direction, leading to the adoption of FTX by the Singapore government, exchanges, VCs, and projects.
Jason points out that VCs and cryptocurrency projects in Singapore and Hong Kong usually need specific licenses. These regulations impose many restrictions on investment and operations. From the perspective of VCs, if every investment is subject to strict regulation, including restrictions on which information can be disclosed, which exchanges can be used or not used, and which projects can be invested in, these restrictions would be too cumbersome for investors.
Expanding beyond investments, Jason further explains that if developers want to hold Demo days or Hackathons in Taiwan, they will generally not encounter government intervention. These seemingly natural activities may require communication with government departments in Hong Kong and Singapore to avoid potential issues or misunderstandings.
As a VC that is “focused on operations” in Taiwan, what substantial push can it bring to Taiwan’s Web3 industry? Jason uses the upcoming “Sora Summit 2023” to be held in Taipei on December 16 as an example. The conference will discuss topics such as the Bitcoin ecosystem, De-Sci, cryptography, etc. He believes that this will indeed bring a lot of Web3 educational energy to Taiwan and inject new vitality into the developer community.
The event has invited several renowned speakers from the global blockchain ecosystem, including Bitcoin Entrepreneurial Laboratory, Origin Protocol, BRC20, Bitcoin Magazine Ventures, OnchainMonkey, and Bankless Ventures. It is worth mentioning that Casey Rodarmor, the creator of Ordinals Protocol, and Domo, the creator of BRC20, will also give public speeches in Taiwan.
Extended Reading:
Sora Summit 2023 to Land in Taipei in December, Discussing the Future of Web3
Bitcoin has been on a strong upward trend since mid-October, and the market believes this is driven by the positive news of a Bitcoin spot ETF. Dynamic Zone also asked Jason, who has experienced multiple bull and bear cycles and is a Bitcoin OG, about his view on the current market. Jason reminds readers that although Bitcoin has recently risen in price, investors must remain cautious because nothing can continue to rise indefinitely.
At the end of the interview, Jason has a message for all partners in the cryptocurrency industry:
The essence of Bitcoin and other cryptocurrencies is not as traditional financial products but innovative technological inventions. They should not be seen as purely speculative products or securities but as technological innovations with broad applications and potential. Jason believes that the emergence of Bitcoin is to counter the traditional securities market and promote decentralization. He uses Amazon as an example of why its stock price can continue to rise.
Therefore, when evaluating the true value of these technologies, the market should consider their practical applications and potential impact on Web3, rather than treating them purely as speculative tools. Between his words, Jason also demonstrates the mission of Sora Ventures to invest in the Bitcoin ecosystem.