Top10 News

1. Hong Kong to allow retail trading of major cryptocurrencies link

According to Bloomberg, Hong Kong will announce that retail investors can trade cryptocurrencies under new rules for the digital asset industry, with individual investors expected to be able to trade tokens such as BTC and ETH starting next month with appropriate safeguards.

On the same afternoon, the Securities and Futures Commission (SFC) of Hong Kong issued a consultation conclusion on the regulation of virtual asset trading platforms. The majority of respondents agreed with the proposal to allow licensed trading platform operators to provide services to retail investors. The SFC will implement a series of appropriate measures to safeguard these investors, including ensuring suitability in the process of establishing business relationships with clients, promoting good governance, enhancing token due diligence, and incorporating standards and disclosures. The SFC welcomes virtual asset trading platform operators who are ready to comply with its standards to apply for licenses. As for operators who do not intend to apply for licenses, they should take steps to orderly wind down their operations in Hong Kong.

The SFC document stated that there were opinions regarding the requirement for non-securities tokens to have a track record of at least 12 months. The regulatory arrangements for stablecoins are expected to be implemented in the 2023/24 fiscal year. Until stablecoins are regulated in Hong Kong, it is believed that they should not be included for retail trading.

Regarding proprietary trading, the SFC acknowledged the importance of liquidity on trading platforms for customers. Therefore, the SFC allows third-party market makers to engage in liquidity provision activities. However, the current prohibition on proprietary trading is comprehensive and effectively prevents licensed virtual asset trading platform group companies from holding any virtual assets.

The SFC stated that platform operators should not provide reward programs related to the trading of specific virtual assets. This principle forms the basis for the prohibition of any advertisements by platform operators regarding specific virtual assets.

Regarding other common services in the virtual asset market, such as yield, deposit, and lending, the SFC does not allow licensed virtual asset trading platforms to provide these services.

2. US economic data’s weekly summary

a. Powell: Federal Reserve committed to lower inflation rate to 2% link

WSJ: Federal Reserve Chair Jerome Powell said the stress in the banking system could mean the central bank won’t have to raise interest rates as high as otherwise to slow the economy. Some officials, including Powell, have hinted that they might pause rate increases to assess the effects of the banking sector strains.

b. St. Louis Fed President: Federal Reserve needs two more 25-basis-point interest rate hikes this year link

St. Louis Fed President James Bullard thinks the US Fed will need two more 25 bps hikes this year. “You’ve got fairly robust growth for the US economy in 2023 and you’ve got inflation that has not come down fast enough.” “For that reason, I think we’re going to have to grind higher with the policy rate.”

c. The core PCE price index in the United States for April registered an annualized rate of 4.7% link

The United States announced that the annual rate of the core PCE price index in April was 4.7%, which was expected to be 4.60%, and the previous value was 4.60%. The core PCE price index in the United States recorded a monthly rate of 0.4% in April, the highest since January 2023. U.S. short-term interest rate futures pared early gains after the inflation data, as traders increased bets on further rate hikes by the Federal Reserve.

3. Multichain functionality disruption

a. Multiple users report abnormal delays in cross-chain fund transfers in Multichain link

Some users reported that there is an abnormal delay in the arrival of Multichain’s current cross-chain funds. The Multichain official responded in discord that the upgrade of the backend nodes took longer than expected. Most routes are working as usual, as some routes (Kava, zkSync, Polygon zkEVM) are temporarily suspended. Previously, Multichain announced that the upgrade would be completed within 24 hours, but currently many users claim that their cross-chain funds have been unable to arrive for 48 hours, or even 72 hours.

b. Fantom Foundation withdraws $MULTI liquidity link

The Fantom Foundation address withdrew the liquidity of 449,740 MULTI (2.4M) from SushiSwap. There are rumors in the community that the Multichain team has been investigated.

c. Multichain states that some cross-chain routes are unavailable due to force majeurelink

Multichain: Some of the cross-chain routes are unavailable due to force majeure, and the time for service to resume is unknown.

After service is restored, pending transactions will be credited automatically. Multichain will compensate users who are affected during this process, and the compensation plan will be announced later.

d. Fusion Foundation founder Qian Dejun unable to contact Multichain’s founder Zhaojun link

On May 25th, Qian Dejun, the founder of Fusion Foundation, stated that they are currently unable to contact Zhaojun, the founder of Multichain. Qian Dejun expressed a willingness to provide technical or other forms of assistance, emphasizing the importance of ensuring the security of user assets and the well-being of individuals. Earlier, there had been disputes between the two parties regarding Multichain’s equity and control rights.

e. Andre Cronje: Fantom’s withdrawn $MULTI tokens have not been sold yet link

On May 25th, Andre Cronje responded to the withdrawal of funding by the Fantom Foundation from Multichain. He stated that due to the uncertainty surrounding Multichain, the foundation has ceased providing liquidity on SushiSwap for its $MULTI token. “LP (Liquidity Provider) makes no sense in uncertain times. Assets have not been sold, as evident from on-chain data. Once Multichain can issue a statement and resolve the matter, we will LP again.” At the same time, Cronje mentioned that assets on Fantom are protected by the Multi-Party Computation protocol, and the Fantom bridge remains unaffected (The Block).

According to DeFiLlama data, the on-chain liquidity of the Multichain token $MULTI has experienced a sharp decline of 90%, dropping from approximately $6.5 million on May 23rd to around $667,000 currently.

f. Binance suspends deposits of bridged tokens from Multichain network link

On May 25th, Binance issued an announcement stating that they will temporarily suspend deposits for the following bridged token networks: POLS-BSC, ACH-BSC, BIFI-FTM, SUPER-BSC, AVA-ETH, SPELL-AVAXC, ALPACA-FTM, FTM-ETH, FARM-BSC, and DEXE-BSC. This suspension is in place while awaiting clear instructions from the Multichain team. Deposits for these assets on other networks remain unaffected and open.

g. In the Multichain $1.76 billion TVL, Fantom network holds the highest share of 36.7% link

Among the $1.76billion TVL of Multichain, the Fantom network accounts for the highest proportion, reaching 36.7%; the assets on the Fantom are about $1.66 billion, nearly 40% of the assets are wrapped assets of Multichain; the main stablecoin on Fantom is 191 million, USDC and 82 millSince Multichain is Fantom’s official cross-chain bridge, it has a large exposure; most chains in Multichain are operating normally, and there is no sign of de-peg of USDC and USDT on Fantom.ion USDT assets are basically issued by Multichain.

Since Multichain is Fantom’s official cross-chain bridge, it has a large exposure; most chains in Multichain are operating normally, and there is no sign of de-peg of USDC and USDT on Fantom.

4. Three US presidential candidates express support for Bitcoin

a. Robert F. Kennedy Jr. will be the first presidential candidate in United States history to accept campaign donations in Bitcoin link

Robert F. Kennedy Jr. will be the first presidential candidate in United States history to accept campaign donations in Bitcoin. He announced at the Bitcoin 2023 conference and praised the cryptocurrency as a “symbol of democracy and freedom”.

b. Vivek Ramaswamy, Republican presidential candidate, announces acceptance of Bitcoin donations link

US Republican presidential candidate Vivek Ramaswamy announced that he will accept bitcoin donations, becoming the second presidential candidate to officially accept bitcoin campaign donations after Robert Kennedy Jr. He chose BitPay’s payment service to accept Bitcoin donations, up to $6,600, and people can receive NFTs after donations. In a recent YouGov poll, Vivek Ramaswamy was around 4%.

c. Florida Governor Ron DeSantis states he will protect Bitcoin if elected president link

On the evening of May 24th, Florida Governor Ron DeSantis launched his presidential campaign alongside Elon Musk in a Twitter Spaces session. During the event, DeSantis expressed his commitment to protecting Bitcoin and opposing any form of ban on cryptocurrencies. According to an NBC primary poll, DeSantis currently holds a 31% approval rating within the Republican Party, lower than Trump’s 46% (The Block).

5. Cryptocurrency exchange Hotbit announced the cessation of operations link

Hotbit, an exchange with 5 million users, announced the suspension of operations today, and users need to withdraw their remaining assets before June 21; the core reason is the deterioration of the operating conditions, Hotbit management team was forced to suspend operations for several weeks due to the investigation in August 2022.

The main reason may be that the founder of Hotbit participated in a project investigated by the Chinese police last year, resulting in the arrest of some managers and the freezing of some accounts by the police.

6. Binance’s weekly summary

a. Binance successfully dismissed the lawsuit filed by Divya Gadasalli from the state of Texalink

According to Bloomberg, Binance has successfully dismissed the lawsuit filed by Divya Gadasalli from the state of Texas. Divya Gadasalli claimed that she was defrauded of $8 million through a cryptocurrency scam orchestrated by a man she met on Tinder. U.S. District Judge Amos Mazzant ruled on Monday that Divya Gadasalli failed to provide “any facts regarding Binance’s actual involvement in this case” and could not establish the court’s jurisdiction over the cryptocurrency exchange. Although Binance is a foreign company with U.S. entities, Binance.US is prohibited from operating in the state of Texas, and the plaintiff failed to demonstrate that any events leading to her fraud occurred in that state.

b. The Binance NFT market has launched the NFT lending function link

The Binance NFT market has launched the NFT lending function, which currently supports BAYC, MAYC, Azuki, and Doodles. BendDAO is now also officially connected to the OKX Web3 wallet.

c. BNB Chain is expected to undergo the Luban hard fork upgrade at block height 29,020,050link

BNB Chain is expected to undergo the Luban hard fork upgrade at block height 29,020,050, which is anticipated to occur on June 11, 21:30 UTC. This upgrade includes three proposals: BEP-126, BEP-174, and BEP-221. BEP-126 introduces the “Fast Finality” mechanism, which ensures that once a block is finalized on the network, it cannot be reversed. BEP-174 proposes “Cross-Chain Relay Management” to address any potential security issues in the BSC bridge. BEP-221 introduces the “CometBFT Light Block Validation” system, which aims to add new contracts to blockchains utilizing the CometBFT technology. (CoinDesk)

d. Reuters: Binance mixes customer funds with company revenue, Binance responds that the report lacks evidence link

On May 23rd, according to Reuters, three sources revealed that Binance mixed customer funds with company revenue in 2020 and 2021, violating U.S. financial regulations that require the separation of customer and company funds. One source stated that the amount involved was in the billions of dollars, and this mixing occurred almost daily in the accounts of the exchange at the U.S. bank, Silvergate Bank. Reuters was unable to independently verify the exact amounts or frequency, but the news agency reviewed a bank record that showed Binance mixing a $20 million deposit from the company’s account with a $15 million deposit of customer funds on February 10, 2021.

In response to Reuters’ report on the mixing of user funds, Binance CCO Patrick Hillman tweeted that the basis of the entire Reuters report was that when users purchase BUSD (Paxos) on Binance, they are taken to a trading page that displays the word “Deposit.” Users are purchasing a stablecoin that can be redeemed by Paxos, and this is clearly indicated on the page. The report is so weak that Reuters had to start the article with the statement, “Reuters found no evidence that Binance lost or misappropriated customer funds,” clearly to protect themselves from defamation lawsuits. The report repeatedly mentions CZ’s ethnic background, which is a clear form of xenophobia.

7. OKX’s weekly summary

a. OKX has applied for regulatory approval in France and plans to establish its European headquarters in Paris link

On May 23rd, according to Bloomberg, OKX has applied for regulatory approval in France and plans to establish its European headquarters in Paris. OKX registered in France in April and aims to recruit approximately 10 people in France over the next six months, with a target of reaching around 100 employees in the country over the next three years. Paris will join Dubai as OKX’s dual headquarters.

b. The latest version of the OKX Web3 wallet app now supports sending, receiving, and trading operations for BRC20 assets link

On May 23rd, OKX announced that its latest version of the Web3 wallet app now supports sending, receiving, and trading operations for BRC20 assets as of 12:00 PM on the same day. Prior to this, OKX had already listed ORDI on its exchange platform.

c. OKX has announced that its latest app update will allow users in Hong Kong to buy, sell, and hold 16 major cryptocurrencies link

On May 25th, OKX announced that its latest app update will allow users in Hong Kong to buy, sell, and hold 16 major cryptocurrencies, including BTC, ETH, ADA, MATIC, SOL, DOT, UNI, LINK, SAND, LTC, AVAX, AXS, ATOM, XLM, USDT, and USDC. Users can make purchases using Hong Kong dollars, P2P transfers, or through third-party providers such as ApplePay, Visa, and Mastercard. This announcement follows OKX’s previous statement about establishing a Hong Kong entity in accordance with the new VASP regulatory framework effective from June 1st.

Previously, according to the Hong Kong Securities and Futures Commission (SFC), tokens provided for retail trading must meet certain criteria, including being included in at least two indices, with one of them being a traditional index covering cryptocurrencies. Among the listed tokens, BTC, ETH, LTC, BCH, DOT, SOL, ADA, AVAX, MATIC, and LINK are the most widely covered by traditional indices. However, CoinDesk has introduced a more comprehensive index covering 28 cryptocurrencies, including various categories such as DeFi, entertainment, and smart contract platforms. It should be noted that the SFC requires tokens to have been listed for at least 12 months, which means that newer tokens like ARB cannot be listed.

It is important to note that OKX currently does not hold a license. The Hong Kong Securities and Futures Commission (SFC) has provided a one-year transition period for existing trading platform operators. The tokens mentioned above have been listed by OKX based on its own compliance with the SFC’s requirements, and further adjustments will be made in accordance with regulatory demands.

d. Approximately 10 accounts were flagged for “suspected blacklisted risk control measures” due to the sudden market movement of $SAMO link

On May 26th, Star from OKX stated that due to the sudden market movement of $SAMO, approximately 10 accounts were flagged for “suspected blacklisted risk control measures”. This strategy temporarily freezes the accounts, and customer service immediately contacts the customers to verify their operations. Currently, all the frozen accounts have been unfrozen. This risk control strategy indeed had flaws, which resulted in false positives in this case. The team is working on improving this risk control strategy. The significant price fluctuations were caused by the appearance of the $SAMO QR code in a CCTV program shared by CZ.

8. WOO X responded to the allegations of misappropriation of assets and insolvency, stating that they are false and can be verified through publicly available data link

On May 23rd, Christopher Brunet published an investigation questioning the financial health of WOO X and suggesting that the platform has misappropriated user assets, leading to insolvency. The main arguments raised include: Custodial assets being less than user assets; High proportion of WOO in reserve assets; Suspicions that WOO’s market-making institutions have unrestricted access to user deposits.

In response to Wu Blockchain, WOO X said: 1. Besides being kept in a custodial manner (accounting for 80%), user assets are also distributed across five different third-party platforms, where users can view the specific amounts and decide the risk themselves; 2. Users have pledged a significant amount of WOO on the platform, hence the high proportion; 3. Kronos Research is a multi-strategy hedge fund, they are limited to providing liquidity on WOO X rather than speculating, and WOO X will also introduce more liquidity providers.

9. Cryptocurrency venture capital firm Paradigm is expanding its focus into the field of artificial intelligence (AI) link

On May 26th, cryptocurrency venture capital firm Paradigm announced its expansion into the field of artificial intelligence (AI). The company now describes itself as a “research-driven technology investment firm” rather than exclusively focusing on investing in “disruptive crypto/Web3 companies and protocols.” The content stating “We believe crypto technology will define the next decades” has been removed from its homepage. Sources indicate that this change does not mean the company is avoiding cryptocurrencies but rather emphasizes its technological research. Paradigm has not altered its mission and continues to focus on cryptocurrencies and Web3.

Paradigm is an investor in FTX and withdrew its $290 million investment in the company after its bankruptcy filing in November. However, Paradigm is still considered one of the most influential and innovative VCs in the cryptocurrency industry. In November 2021, Paradigm raised a $2.5 billion fund, which was the largest crypto fund at the time. Its portfolio includes investments in FTX, Uniswap, OpenSea, Fireblocks, and more.

10. Gemini: DCG did not pay the approximately $630 million that came due last week link

On May 22nd, Gemini stated that due to Genesis, the parent company of DCG, being unable to pay and/or restructure its $630 million debt that was due on May 11th, Gemini is currently in discussions with Genesis, DCG, and the creditors to negotiate a grace period for DCG to avoid default. However, if an agreement is not reached, Gemini and the other parties will present a revised restructuring plan to Genesis that does not require DCG’s approval. At the same time, Gemini is preparing to file a claim seeking the return of over $1.1 billion in digital assets for its more than 200,000 Earn users from Genesis.

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