The crypto space is uneven across the globe, with Web3 startups flourishing in the Middle East and Asia, while North American crypto entrepreneurs face challenges in a challenging macroeconomic and regulatory environment, says Yat Siu, CEO of Animoca Brands.

Speaking to Cointelegraph at the Collision conference in Toronto, Siu highlighted the main differences between the environment for crypto businesses around the world, stressing that it’s not “as bad as it sounds.”

According to him, Web3 startups can still get funding from venture firms, but current conditions such as higher interest rates around the world along with a drop in crypto-asset prices have raised the bar for newcomers.

“Of course the valuation has gone down, but the number of builders entering the space, the number of smart contracts deployed and the number of people is still growing. In general, we are very optimistic,” he noted, noting that Animoca has added nearly 60 investments to its portfolio in recent months.

Although the space is active, it is not as strong as it used to be. According to the recent PitchBook Crypto Report for the first quarter of 2023 crypto companies raised $2.6 billion in 353 investment rounds. Deal value was down 11% quarter-over-quarter and total deal value was down 12.2%.

Siu’s comments come after major developments affecting the crypto space since the dramatic collapse of FTX in November 2022. In the United States, for example, the Securities and Exchange Commission has launched a crackdown on crypto firms in an effort to regulate the industry through enforcement actions. .

In contrast, Hong Kong has implemented a licensing system for crypto businesses to mitigate the risks associated with digital asset markets. The United Kingdom has taken a similar approach, passing legislation that gives regulators the power to introduce and enforce regulations for crypto businesses.

“If you’re thinking from a North American perspective [about crypto venture capital], it may sound wrong. When you go to the Middle East, to Asia, it’s actually very vibrant,” noted Siu. According to the CEO, the regulatory aspect has been a “hammer” on Web3. “It creates a lot of fear because people don’t know what’s going on,” he continued.

The seasoned crypto-entrepreneur does not believe in coincidences when it comes to different countries’ approaches to the industry. For Siu, the favorable environment in Asian countries and hostile movements in the US are part of the countries’ agenda for emerging technologies.

“Advancing Web3 as a narrative is also about the national interest over and above the end user’s interest in sovereign identity. And the US is doing everyone a favor. Unfortunately, because I think the US is important in this, […] for political reasons, they leave their role in the hands of other places around the world. But the exciting part is that it allows ecosystems to flourish like never before.”

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