1. One of the reasons why Internet funds may have regulatory arbitrage is that the regulatory system is not perfect: when Internet finance just emerged, the regulatory system has not fully adapted to the development of this new format, making some Internet funds look for loopholes in the regulatory system and carry out regulatory arbitrage.
2. Information asymmetry: Because Internet finance has the characteristics of high informationization, digitalization and networking, it is often difficult for investors to obtain enough information to evaluate the risks of Internet funds. This makes it possible for some internet funds to attract investors by concealing information or misleading publicity, thus achieving regulatory arbitrage.