Animoca’s Yat Siu: Beijing white paper lays groundwork for crypto renaissance in China

Quick Take

  • Animoca chairman Yat Siu sees a white paper published by Beijing authorities last week as a sign Chinese consumers may be able to access web3 legally in the future.
  • The Hong Kong-based investment firm is encouraging its U.S. startups to consider expansion options in Asia.

Yat Siu, chairman of the acquisitive web3 investor Animoca Brands, sees a white paper on web3 development published by Beijing authorities over the weekend as the foundation for revitalizing the crypto industry in mainland China.

The white paper — published by the Beijing Municipal Science & Technology Commission on May 27 — described web3 technology as an “inevitable trend for future Internet industry development.” It states that Beijing aims to strengthen policy support and seek technological breakthroughs to support the industry.

“I think it could be viewed as an avenue eventually laying the groundwork for perhaps people in China to also participate officially and legally in the ownership and acquisition of digital assets through Hong Kong,” Siu said during an interview conducted from a taxi in Riyadh.

“It is a bit of a big deal and I think we shouldn’t just look at the big deal in isolation. We should look at the big deal in connection with what happened in Hong Kong just days before,” he added. “I don’t think it’s at all a coincidence.”  

Authorities in Hong Kong said last week that retail trading of larger tokens will be permitted in the region from June 1 — part of widely-broadcast plans to transform the city into a hub for digital assets.

Web2 colonialism

Another potential non-coincidence is the hard-line regulators in the United States have taken on crypto since the collapse of Sam Bankman-Fried’s FTX late last year.

Since then, the Securities and Exchange Commission has filed charges against multiple crypto outfits, as well as some celebrities who had endorsed cryptocurrencies. Concurrently, two crypto-friendly banks in the U.S. — Silvergate Bank and Signature Bank — have been shut down by regulators, leaving precious few banking options for startups in the space.

Asia’s emerging crypto hubs — such Singapore, Seoul and Hong Kong — appear to sense opportunity stemming from the crypto crisis in the U.S., but Siu thinks Beijing may have other motives for nurturing the sector.

“Every developer in the world is dependent on Apple’s whims to approve whether the app can exist — and they just happen to be American,” Siu said.

“The technologies around web2 have created a different kind of colonization of American technology to the world. Almost every country in the world is dependent on Facebook and LinkedIn and Google and Microsoft and all that kind of stuff, and web3 provides an opportunity for other sovereign nations to basically say, ‘Let’s build a different framework that is either more open or more inclusive or maybe even more sovereign.’”

The Asian dream

The Block Research’s deals dashboard, which tracks publicly available information, puts Animoca as the sector’s second most active investor with 232 total deals — behind only Coinbase Ventures with 366. Siu, however, said the company now boasts around 450 investments to date. Whatever the case, the pace of Animoca’s deployment seems relatively stable. The Block Research counts 25 deals for the company in 2023 as of May 12 — making it the sector’s sixth most active investor this year.  

Animoca is currently seeking $1 billion from external investors for a web3 and metaverse fund, having initially targeted twice that amount. The fund is currently applying for a license to operate in Hong Kong, Siu said. 

Whether a greater proportion of Animoca’s capital ends up focused on Asia in the future remains to be seen. Siu — who founded Animoca in Hong Kong in 2011 and pivoted the business into crypto and NFTs in around 2017 — said the business won’t yet pump the brakes on U.S. investments. He conceded, though, that Animoca is already encouraging its startups to consider their options.  

“I mean clearly the opportunities based in Asia are better, and so we advise all our companies that are in the U.S. also to look at Asia as an opportunity,” Siu said, adding that the U.S. is “throwing away its lead in this space for entirely political reasons.”

“I say this half-jokingly, but I do mean it when I say that the American dream is much more alive and well in Asia than it is in America.”

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.