Regulation
Will Hong Kong Crypto ETFs Outpace US on First Trading Day?
On the eve of the historic launch of Hong Kong’s first virtual asset ETFs, China Asset Management (Hong Kong) held a detailed briefing discussing the expected market impact and distinctive features of these new investment products. The press conference delivered by Zhu Haokang, head of digital asset management, and Wayne Huang, head of OSL ETF and custody business, pointed out the possibility of considerable capital inflows that could exceed those that similar launches in the United States have produced.
Hong Kong ETF issuer expressed confidence that the issuance scale of the HK cryptocurrency spot ETF on the first day of listing tomorrow will exceed the first day of the United States (US$125 million). Many investors in Singapore, the Middle East and other places are very…
— Wu Blockchain (@WuBlockchain) April 29, 2024
Anticipated Market Performance
Zhu was confident that the first-day trading volume of the Hong Kong virtual asset spot ETFs would surpass the initial US$125 million of the U.S. Bitcoin spot ETFs launched in January. Huang also observed that the first-day fund raising was already pointing to robust transaction volumes over and above what was expected.
Such an optimistic attitude emphasizes the increasing interest and belief of the Hong Kong financial market in facilitating innovative financial products such as cryptocurrency ETFs.
Unique Features of Hong Kong’s Crypto ETFs
The soon-to-be-listed Spot China Bitcoin ETF and Spot China Ethereum ETF have some particular features not observed in other markets. Zhu Haokang pointed out that these ETFs are the only ones that provide spot and physical subscriptions and redemptions, something not offered in the US.
These are the only ETFs that will have counters in Hong Kong dollars, US dollars, and RMB. In addition, ChinaAMC’s opposing competitors only offer listed shares, while ChinaAMC proposed to offer both listed and unlisted shares, which gives investors more options.
The interest in these ETFs has been especially pronounced among investors from different regions, such as Bitcoin miners and family offices in the Middle East and Asia. The physical method of subscription has especially gained attention from a range of investors who use their Bitcoin holdings to buy shares directly. This global appeal probably exists because of the fact that the ETFs are available throughout Asian trading hours, which offers a new type of trade for investors, particularly those from the United States seeking to diversify both their trade time and tactics.
Regulatory and Operational Innovations
Operational processes of these ETFs also created a standard of stronger controls of anti-money laundering methods. According to Wayne Huang, the physical subscriptions would have to go through extensive verification that will include whitelisting of investor-controlled wallets and a review of past transactions to assure compliance. This novel method underscores Hong Kong’s resolve to retain a controlled and safe environment for the trade of cryptocurrencies.
While currently limited to Bitcoin and Ethereum, discussions are ongoing with the China Securities Regulatory Commission regarding the inclusion of additional virtual assets.
The process involves detailed legal assessments and due diligence to ensure that any new listings adhere to strict regulatory standards before they can be offered to professional investors, and eventually to retail investors, after a certain liquidity threshold is achieved.
Read Also: Lawmakers Urge Biden Admin for Heightened Crypto Oversight
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
In what is being dubbed a major development in the crypto regulation space, the Governor of the US state of Kentucky, Andy Beshear, has signed the ‘Bitcoin Rights’ bill into law. The law promises to safeguard protections for Bitcoin (BTC) users.
Bitcoin Rights Bill Comes Into Effect
Crypto regulations continue to evolve under pro-crypto US President Donald Trump’s administration. In the latest development, Kentucky has become the newest state to enshrine protections for digital asset users.
In an X post published on March 24, crypto advocacy group Satoshi Action Fund announced that Governor Beshear had signed the much-anticipated Bitcoin Rights bill into law. The post stated:
The right to self-custody, run a node, and use of digital assets is now protected for millions of Americans without fear of discrimination.
The bill was first introduced to the Kentucky House by Rep. Adam Bowling on February 19. According to the bill’s description, it seeks to safeguard users’ rights to use digital assets and self-custody wallets. Additionally, it aims to prohibit local zoning changes that discriminate against crypto mining operations.
The legislation outlines guidelines for running a digital asset node and excludes digital asset mining from money transmitter license requirements. It also clarifies that crypto mining or staking is not considered an offer or sale of securities.
On February 28, the bill passed Kentucky’s House of Representatives with a unanimous vote of all 91 representatives in favor. It later passed the Kentucky Senate on March 13, receiving backing from all 37 senators.
Kentucky’s proactive stance toward cryptocurrencies isn’t new. Earlier this year, the state became the 16th US state to introduce legislation seeking to create a Bitcoin strategic reserve.
Meanwhile, neighboring state Arizona is also joining the crypto movement. A recent X post by Bitcoin Laws revealed that Arizona’s House Rules Committee has passed two Bitcoin reserve bills — SB1373 and SB1025. These bills will now head to a full floor vote.
Renewed Optimism Under Trump Administration
Following Trump’s victory in the November presidential election, cryptocurrency regulations in the US are evolving rapidly, with many states introducing legislation aimed at strengthening their digital asset ecosystems and attracting crypto businesses.
Positive changes in crypto regulations are encouraging industry businesses to expand. For instance, leading crypto trading platform Coinbase recently announced plans to hire 1,000 employees in the US.
The Trump administration has also witnessed several lawsuits being dropped against major crypto entities, including Kraken, Coinbase, Gemini, and others. At press time, Bitcoin trades at $87,399, down 0.2% in the past 24 hours.
Featured Image from Unsplash.com, chart from TradingView.com
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Hawk Tuah girl Hailey Welch, known for her association with the controversial $HAWK token, has been cleared of any wrongdoing after a lengthy investigation by the U.S. Securities and Exchange Commission (SEC). The SEC has decided not to press charges against Welch in connection with the rapid rise and subsequent collapse of the meme-based cryptocurrency.
US SEC Investigation Into Hawk Tuah Girl Concludes Without Charges
The SEC had launched an investigation into the $HAWK token after its dramatic price drop. The token, which was linked to Welch’s viral persona, initially saw a market cap surge to $490 million before crashing by over 90%. Investors who were impacted by the crash filed a lawsuit against those behind the project, alleging that the coin had been promoted and sold without proper registration.
Hawk Tuah girl Hailey Welch, who cooperated fully with the investigation, expressed relief after the SEC’s decision. “For the past few months, I’ve been cooperating with all the authorities and attorneys, and finally, that work is complete,” Welch told TMZ.
Her attorney, James Sallah, confirmed that the SEC had closed the case without any findings against her, adding that there would be no monetary sanctions or restrictions on Welch’s future involvement in cryptocurrency or securities.
This Is A Developing News, Please Check Back For More
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Barely a week after hinting at launching an algorithmic USD stablecoin, Sonic Labs is shuttering its plans. Sonic Labs co-founder Andre Cronje revealed that incoming stablecoin regulation in the US contributes to the change of stance.
Sonic Labs Makes U-Turn Over Algorithmic USD Stablecoin
In mid-March, Sonic Labs disclosed plans for a yield-generating algorithmic stablecoin for its blockchain. However, new developments in the US regulatory landscape are forcing the company to ditch its algorithmic stablecoin ambitions.
Sonic Labs co-founder Andre Cronje confirmed the change in direction via an X post following the release of the full draft of the STABLE Act by Congress for clearer oversight. According to the text, lawmakers are pushing for a two-year moratorium on algorithmic stablecoin, souring Sonic Labs plans.
Unlike mainstream stablecoins backed by fiat or other commodities, algorithmic stablecoins rely on smart contracts to maintain their peg. The 2022 implosion of Terra’s ecosystem following the de-pegging of its TerraUSD (UST) algorithmic stablecoin stunned regulators.
“We will no longer be releasing a USD-based algorithmic stablecoin,” said Cronje.
In a light-hearted note, community members teased potential strategies for Sonic Labs to sidestep incoming stablecoin regulation. Apart from the loophole of launching the algorithmic stablecoin before the regulation goes live, Cronje teased an algorithmic dirham that will be denominated in USD.
Industry Players Are Bracing For New Stablecoin Regulations
Stablecoin issuers are steeling themselves for incoming stablecoin regulations in the US. While the GENIUS Act and STABLE Act continue to inch forward, there are common denominators in both bills.
For starters, there is the requirement for equivalent reserves at a 1:1 ratio with both bills steering clear of algorithmic stablecoins. The White House is favoring the GENIUS Act over the STABLE Act as lobbyists rally to stifle the possibility of a Conference Committee.
Authorities are targeting stablecoin regulation to reach Trump in two months as issuers jostle for position. Tether, Circle, and Ripple are staking their claims to lead the US government’s ambitions to rely on stablecoins to maintain the dollar’s dominance.
Aliyu Pokima
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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