Over the last couple of years, China has slowly been clamping down on Hong Kong more and more and trying to integrate it into the mainland. Overall the results have not been to the extent that the mainland Chinese government has wanted Hong Kong has definitely lost a lot of its Western views that made it such a great bridge between the East and West. The result of this has been crypto startups and other tech companies having to either choose between the two sides or try and move to a third country like Singapore which has grown in importance as serving as the bridge that Kong Kong used to have an exclusive hold on.
In the US for years crypto start-ups really did not have to deal with to much regulation and more often than not projects were left alone except for a few examples like Ripple Labs. As soon as FTX crumbled through the US and by the US I mean the SEC has been cracking down like a crazy person on crypto. This has heavily differed from how Hong Kong has handled the situation as they are now looking to open up to retail investor traders for some large-cap tokens. Given the complete flip-flop in policies, it is quite shocking and if China allows Hong Kong to move forward with these plans then it is possible this will trigger a reaction in the US.
Since the start of this new Congress Republicans in the House have made it clear that they are worried about China and it overtaking the US in cutting-edge science and technology. Not only that but really anywhere in the economy that China could try and create the rules Congress is worried about and wants to do everything it can along with other Western powers to make sure that does not happen. This is why China's decision is so key and vital as Congress will act much quicker if they feel they could lose an economic edge. Meaning they could easily tell the SEC to back off and calm down or threaten to pass legislation that would remove powers that the SEC is currently utilizing in this insane wheeling and dealing crackdown.
Reigning in the SEC and Congress passing legislation is key for the future of the industry. We have seen with FTX that if you do not provide guidance and instead throw together a bunch of random laws/ideas the result is going to be chaos and companies not being based in the US and instead going to other countries like the Bahamas, Singapore, etc. which is the worst thing for US consumers. Congress will not want to have to deal with companies offshoring or people having to deal with additional foreign company financial fallout given how bad it currently is. Neither political parties want to have that occur and so bipartisanship could get a chance to sign through and result in something good happening for the American people. Politicians have been taken to task for the FTX fallout given the money that they were given so they will look to avoid that at all costs.
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