While being one of the highest adopters of digital currencies, Vietnam is not the friendliest jurisdiction for digital currency and blockchain firms. According to a new report by local news outlet VnExpress, thousands of digital currency firms founded in Vietnam have their legal headquarters abroad.

The report noted that these companies, while conducting their operations and having the majority of their personnel in Vietnam, are most commonly incorporated in Singapore, Malaysia, or Hong Kong. The report asserted that the regulatory climate of Vietnam often leaves them no choice.

Several startup executives speaking with the news outlet lamented the situation in Vietnam. They point out that the country lacks a clearly defined legal framework for establishing a digital currency company. Vietnam also puts digital currency startups through many hurdles that make it difficult to get international funding.

Nguyen Thanh Trung, CEO of Sky Mavis—the developers of Axie Infinity, said startups like his prefer Singapore because of its contrast with Vietnam. In Singapore, there are clear-cut regulations governing both the blockchain companies and investors, allowing startups to flourish.

“Without a clear legal framework, startups always live in fear while operating. They have to be on the defensive thinking about how to comply with the law rather than spend that time on business and development,” Trung said.

The trend is quite disturbing for the country, which is a hotbed of blockchain gaming startups. Per a report by Fortune, inspired by the success of Axie Infinity, blockchain gaming startups have flooded the Southeast Asian country. Vietnam has over 1,000 blockchain gaming startups, and around 10 of them have a valuation of over $100 million.

Vietnam is still…