One of the founders of China’s first crypto exchange, BTCC, has hinted on some of the factors that he thinks distinguishes China’s crypto market from that in the US.

Bobby Lee, who now runs crypto wallet startup, Ballet, said in the interview that it’s now clear that China is not going to be friendly with crypto hence its regulators will not tolerate crypto trading, companies offering crypto trading or mining services. 

Chinese regulators see it as too much of a risk to the financial system, he said. In the US, on the other hand, where the regulatory body is still open-minded and fundamentally a different philosophy in terms of how laws are made, Lee believes it would be hard for crypto to be deemed illegal particularly if people want it.

The US has a very strong framework on regulation, he asserted citing the existence of the Securities and Exchange Commission, the Commodity Futures Trading Commission etc which govern commodities trading, stocks, equity trading, futures trading and others.

“That’s also why the trading stuff in the US is much more tamped down,” he said. “There’s a smart market – Coinbase, Gemini, Kraken, Circle – very well capitalised institutions offering exchange services but they don’t do any leverage stuff at least not the way it’s done in Asia.”

He also touched on some other areas of differences aside from the regulatory approach.

“What I’ve observed in the last fifteen years since I’ve been living here in China is that people here in Asia and China are much more fascinated by the price movement by the trading of Bitcoin, by the way people can make money trading Bitcoin,” he said, citing citing some of the more popular ways for people in China to participate in Bitcoin trading.

They include through leverage trading products, future options, the rolling expiration futures and all others as they are being offered by the various exchanges serving the Chinese market. There’s also a lot of mining activities, he adds even though he maintains that most of the activities have now been formally shut down and discouraged by Chinese regulators.

“In the US, I think people look at Bitcoin – and there are always exceptions to what I am saying – but generally speaking, the US is more of an investment, it’s more of people talking about Bitcoin as a cryptocurrency (and) as a form of payment. I think it’s kind of interesting that there is a different angle to it and partly why? It’s because in China, payment is not allowed. The government expressly forbids Bitcoin as a form of payment because it’s not recognised as a currency and this has been the case since 2013. Whereas in the US, it’s more liberal, more free. More companies are allowed to accept payment in Bitcoin as they choose.”

Another key factor that he says differentiates the two markets is that the US has an underground economy for drugs and other illicit services and goods. “Sometimes, those are paid for in Bitcoin, whereas in China that activity is clearly not prevalent so there is no need for Bitcoin as a (form of) payment in China for goods and services,” he said.

Lee also thinks that people in the US are generally of a different personality. They are people who don’t bother “to trade extreme volatility for profit, leverage and stuff like that.”