Jihan Wu sees positives in regulators’ pressure on the cryptocurrency industry

Tighter oversight by regulators could benefit the cryptocurrency industry, billionaire and Bitmain co-founder Jihan Wu said in a comment CNBC.

In his view, regulation “filters out malefactors” and improves the industry’s reputation amid rapid growth.

“Regulatory pressure is stronger than before. […] I think such aggressive enforcement could be beneficial in the long run,” Wu noted.

He also suggested that more active engagement between representatives of the cryptocurrency industry and authorities is necessary and would likely yield positive results.

As an example, the billionaire pointed to Singapore, where his crypto-financial enterprise Matrixport is based. Wu said that the government of the country has taken a sensible position on its relations with the digital-asset space.

“There are many compelling reasons for Singapore to become a hub of crypto-innovation,” he added.

In May, three associations under the People’s Bank of China issued a joint notice forbidding companies to support cryptocurrency-related business.

Later Liu He stated that the authorities planned to take measures in relation to digital-asset mining and Bitcoin trading.

Over the course of the month, authorities in several Chinese provinces ordered miners to cease operations. Among them: Yunnan, Sichuan, Qinghai, Xinjiang and Inner Mongolia.

Bitmain offered its clients help in relocating abroad. The American mining company Foundry predicted that by the end of June about 90% of Chinese cryptocurrency mining enterprises will shut down equipment due to prohibitive measures by authorities against the industry.

In June, the cryptocurrency exchange Binance faced regulator pressure. A probe into the platform’s operations began on the Cayman Islands, in Thailand accused it of operating without a license, and in Japan another warning was issued. The Polish regulator urged caution in using the platform.

The UK’s Financial Conduct Authority banned Binance Markets Limited from any regulated activity in the country without prior written approval.

Earlier, Gemini co-founder Cameron Winklevoss said he planned to beat Binance in the regulatory battles in light of its troubles with regulators.

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