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Hong Kong Embraces Crypto Sector with Robust Regulation
Hong Kong is preparing to welcome virtual-asset service providers as it introduces a new licensing regime on June 1, 2023. Hong Kong Monetary Authority Chief Executive Eddie Yue emphasised that while the city is eager to create an exciting crypto ecosystem, it will maintain strict regulations to ensure a sustainable environment. Mainland Chinese traders, however, will not be included due to Beijing’s crypto crackdown in recent years.
Under the new regime, permits for crypto asset platforms will be issued and a mandatory licensing system for stablecoins is expected within the next year. Although requirements for obtaining a virtual asset provider license in Hong Kong are stringent, they ensure a high standard for industry players. Crypto exchanges will be required to undergo background checks on issuers and developers and will need to be fully insured to cover any risks or potential losses, fostering trust and security in the sector.
In contrast, the situation in the United States is gridlocked for crypto companies. Bittrex, the latest casualty in the war on crypto, filed for Chapter 11 bankruptcy protection on May 8 as the Securities and Exchange Commission increased its enforcement actions on crypto exchanges nationwide.
Hong Kong’s approach to embracing the crypto sector aims to strike a balance between fostering innovation and maintaining strict oversight of tokens listed for trading while not permitting market-making. This strategy ensures that the city will be a hub for the sustainable growth of the crypto industry. Read more here.
As Hong Kong adopts a positive regulatory framework, projects like Splitchain and its native token Zucoins stand to benefit. The city’s commitment to high standards and a secure environment offers a promising landscape for Splitchain’s growth. Hong Kong’s balanced approach will likely boost confidence in projects like Splitchain, contributing to the success and wider adoption of Zucoins in the thriving crypto ecosystem.
Bittrex Files for Bankruptcy Amid Regulatory Pressure
Cryptocurrency trading platform Bittrex has filed for Chapter 11 bankruptcy protection in the District of Delaware, with over 100,000 creditors, and assets and liabilities each estimated between $500 million and $1 billion. The filing follows the US Securities and Exchange Commission (SEC) charging Bittrex and its co-founder William Shihara with securities violations in April 2023, claiming both Bittrex, Inc and Bittrex Global operated an unregistered securities exchange.
The bankruptcy covers Seattle-based Bittrex, Inc, two Maltese Bittrex entities, and affiliated entity Desolation Holdings LLC. Bittrex Global GmbH, the Liechtenstein-based global entity for the exchange, was not included in the filing. The US Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) previously charged Bittrex with Bank Secrecy Act violations, leading to a $29 million settlement.
Bittrex’s largest creditor is OFAC with a $24.2 million claim, followed by a crypto wallet with a $14.5 million claim. FinCEN is listed as a top 50 creditor with a $3.5 million claim, while the SEC has an undetermined amount of claims. Bittrex’s bankruptcy is the latest in a series of Chapter 11 filings by crypto exchanges and lending platforms, including FTX, BlockFi, Celsius, and Voyager Digital. Read more here.
US Dollar’s Reserve Currency Status Under Threat
Kentucky Senator Rand Paul warns that the US government’s foreign and fiscal policies are pushing BRICS (Brazil, Russia, India, China, South Africa), and other nations, including Iran, North Korea, and Saudi Arabia, to find alternatives to the US dollar for settling international trades. In a Fox Business interview, Paul states that an increasing amount of the world’s trade is being denominated in currencies other than the US dollar, with foreign policy driving adversaries closer together and into a coalition that wishes to denominate their trades in alternative currencies.
Paul attributes the dollar’s precarious position to the government’s loose monetary policies, which devalues other nations’ dollar reserves as the US continues to debase its currency. He notes that the dollar’s value could also be affected by the US buying up large amounts of its own debt.
The Senator argues that both foreign policy and fiscal irresponsibility are placing the dollar in a vulnerable position, suggesting it is not an unfounded prediction that the US could lose its status as a reserve currency. Read more here.
As nations explore alternatives to the US dollar in response to its vulnerable position, innovative projects like the Splitchain network and its digital asset Zucoins could find additional opportunities for growth and adoption. With an increasing amount of world trade being denominated in alternative currencies, there could be a rising demand for alternative digital assets with the ability to quickly and easily exchange value peer-to-peer anywhere in the world. These shifts in global trade dynamics and increasing acceptance of cryptocurrencies present a unique chance for Splitchain and Zucoins to establish themselves as a reliable and attractive option for settling transactions.
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All the best,
Peter
MyZucoins