Bitcoin services provider Xapo is winding down activities at its Hong Kong base and transferring key operations to Switzerland. Xapo president Ted Rogers said the move has been driven by Switzerland’s friendlier regulatory environment.
“It was once thought that Hong Kong was the holy grail of crypto regulations,” Rogers told swissinfo.ch at the World Web Forumexternal link in Zurich. “But it has become more opaque.”
“It’s a reality of this industry that you have to be agile and react to regulatory changes all the time. Swiss regulators are smart, interested and sophisticated in dealing with the financial markets.”
The Xapo operational transfer will involve non-United States bitcoin wallet customer services being moved from Hong Kong to Switzerland, with traditional cash accounts being handled from London.
Xapoexternal link is incorporated in Hong Kong, but Rogers said that this status is now an open question. He would not elaborate on how many extra jobs the strategy change may bring for Switzerland. Xapo employs around 250 people, but less than 10 are currently situated in canton Zug. It also reportedly holds around $10 billion of clients’ bitcoin in a former military bunker in the Swiss alps.
Xapo first opened its Zug office in 2015 to take advantage of Switzerland’s neutrality, political stability, strong data protection laws and tradition of financial privacy. In doing so, it became one of the early pioneers of the now booming Crypto Valley.
“Nothing has changed my belief that Switzerland is the right place for a blockchain or crypto project,” said Rogers, who also cited the decentralised Swiss political system among its plus points. “It’s everything that the US was designed to be, but actually lives up to it,” he said.
The Swiss government has recently tabled a series of legal changes to incorporate the technology into the mainstream economy.
Xapo was one of the earliest crypto financial services providers, but other competitors have moved into the space. One of them, Swiss Crypto Vaultexternal link, also features a Swiss alpine bunker. Several competitors also take in other cryptocurrencies and offer debit cards.
Xapo’s own debit card line was shut down by Visa a year ago. Rogers said the company has learned from the experience and plans to offer fresh Visa and Maestro card services tailored to each region. He would not say when this would be in operation.
Rogers insisted that his company is well placed to survive the so-called ‘crypto winter’ that has seen the value of bitcoin and other cryptocurrencies crash in terms of dollar exchange rates. He admitted that the volume of fee-generating transactions was down but added that clients are still keeping their bitcoin in Xapo vaults.