5 Latest Big Developments in the Crypto Space
Posted On June 14, 2023
Hong Kong will allow retail trading of cryptocurrencies from June 1, Conflux prices surged by an impressive 19% in just a single day, Binance faces allegations of commingling customer funds with company revenue from Reuters, Florida Governor Ron DeSantis announces presidential bid and criticizes restrictive regulations on Twitter Spaces, and Solana integrates AI with its blockchain, enabling interaction through a ChatGPT plugin. Here are the latest big developments in the crypto space in the last couple of weeks and how they will impact the market.
Hong Kong to Let Retail Investors Trade Crypto From June 1
Hong Kong is set to become a global Web3 hub. In a step towards fostering innovation and attracting more participants from the crypto market to the city, the Securities and Futures Commission (SFC) has finalized rules allowing retail trading of cryptocurrencies starting from June 1.
Platforms can apply for a license from June 1, while unlicensed ones should close their business in Hong Kong. The SFC expects licensed firms to start accepting retail traders in the second half of this year, enabling individuals to actively trade crypto.
Licensed exchanges can provide retail investors with cryptocurrencies with significant market capitalization and high liquidity, such as Bitcoin and Ethereum.
However, to ensure the safety and integrity of the market, these platforms must meet various requirements, including the implementation of measures such as safe custody of assets, segregation of client assets, avoidance of conflicts of interest and maintaining robust cybersecurity standards.
Additionally, exchanges are mandated to establish a token admission and review committee responsible for overseeing the governance of cryptocurrencies offered on their platform. The committee will help maintain transparency and the quality of the listed tokens.
On top of that, they must also be included in at least two acceptable and investible indices provided by independent providers to ensure that the tokens have broader recognition and align with the standards of both traditional and emerging financial markets.
At the Bloomberg Wealth Asia Summit, Eddie Yue Wai-man, the Chief Executive of the Hong Kong Monetary Authority (HKMA), pledged to allow the industry to develop and innovate on its own while promising tight regulations to avoid industry meltdowns, like the FTX collapse, to prioritize investor safety over everything.
Moreover, advertising unlicensed cryptocurrency exchanges, which includes endorsements and promotions by opinion leaders and influencers, is now a criminal offense. Same with promoting or encouraging people to invest in fraudulent or reckless crypto assets.
Hong Kong is a Special Administrative Region of China and has slightly more autonomy in regulating its economic and social structures. Therefore, while Hong Kong is taking steps to embrace the crypto industry, digital assets remain illegal in mainland China.
Conflux Making Waves
Conflux Network (CFX), often referred to as the Chinese Ethereum, has been causing quite a stir in the crypto space. Very recently, its prices surged by an impressive 19% in a single day, leaving many investors and enthusiasts intrigued. Conflux is a fast and cost-effective solution, claiming to be the sole regulatory-compliant public blockchain in China.
Some market analysts are attributing this recent price surge, at least in part, to the Hong Kong announcement. However, its rise in market capitalization from a modest $46 million to a staggering $650 million since the start of this year suggests otherwise. As a result, Conflux has emerged as one of the top-performing cryptocurrencies in 2023.
Part of its success can also be associated with its strategic moves to penetrate the Chinese market. The platform has partnered with renowned global brands and government entities, such as Shanghai, McDonald’s China, and Oreos, to collaborate on innovative blockchain and metaverse projects.
Moreover, Conflux recently joined forces with China Telecom, the second-largest wireless carrier in the country, to develop blockchain-based SIM cards—an exciting project for the future of mobile connectivity.
However, despite the price surge and numerous big announcements, the on-chain data reveals low transaction counts compared to the previous high last fall, indicating that Conflux still lags in establishing a substantial user base.
The Binance–Reuters Clash
In a recent special report, Reuters raised concerns regarding Binance, one of the world’s leading crypto exchanges.
Citing former insiders as their sources, Reuters alleged that Binance had commingled customer funds and company revenue. While the report emphasized that Reuters have no evidence of lost or stolen customer funds, insiders claimed that billions of dollars were mixed almost daily.
The term “commingling” has become somewhat of a buzzword in the crypto world after the FTX scandal, referring to the mixing of customer funds with company revenue.
Responding to the report, Patrick Hillmann, Binance’s Chief Communications Officer, took to Twitter to refute the claims and criticize Reuters. He labeled their report as weak, based on conspiracy theories, and accused the news agency of xenophobia for repeatedly highlighting the ethnicity of Changpeng Zhao, Binance’s CEO.
In response to his tweet, Austin Federa, the head of strategy at Solana, called out Patrick for not outrightly denying the allegations made in the report. Patrick responded with another tweet saying, “We keep our user and corporate funds on completely separate ledgers.”
Despite the clash, Reuters stands firm on its reporting.
On Wednesday, May 24, Florida Governor Ron DeSantis took to Twitter spaces (alongside Elon Musk) to announce his intent to run for the upcoming presidential election, surprising the audience and generating buzz in the political sphere. However, his insights on Bitcoin, regulations, and central bank digital currencies (CBDCs) are what is relevant to us today.
During the discussion, DeSantis didn’t shy away from criticizing the current regulatory regime. He firmly believes that the current regulations are excessively restrictive, primarily because they are seen as a challenge to the existing government structure.
He went on to caution the audience, saying, “I just do not have an itch to have to control everything that people may be doing in this space, and I think the current regime, clearly, they have it out for bitcoin, and if it continues for another four years, they’ll probably end up killing it”.
DeSantis promised to protect the freedom to engage with digital assets and cryptocurrencies, stating, “As president, we’ll protect the ability to do things like Bitcoin.”
But the involvement of DeSantis in the crypto world extends beyond mere words and promises. As Florida’s governor, he signed legislation On May 12, 2023, that prohibits the treatment of any Central Bank Digital Currency (CBDC) as legal tender under the Florida Uniform Commercial Code. This move positions Florida as the first state to take a firm stand against CBDCs.
DeSantis, and a few other influential figures, both within and outside the crypto community, share the same concerns regarding the potential risks CBDCs pose to financial security and privacy.
According to DeSantis, granting the government complete control and surveillance over our financial habits could compromise our financial security and privacy, adding, “That would mean a huge imposition in people’s financial freedoms and privacy. If the central authority has control over it, they would start imposing environmental, social and governance (ESG) criteria.”
Governor Ron DeSantis’ Twitter Spaces discussion provided an intriguing glimpse into his thoughts on Bitcoin, cryptocurrencies, and the dangers of CBDCs.
Solana Integrates AI with ChatGPT Plugin
Solana, the popular blockchain platform, has taken a major leap forward by integrating artificial intelligence (AI) with its blockchain technology.
Solana Labs, the developer behind the Solana blockchain, recently announced the release of a ChatGPT plugin on a GitHub repository, making it the Layer 1 blockchain to integrate AI.
By leveraging this ChatGPT plugin, developers and enthusiasts can now gain a deeper understanding of Solana’s data, protocols, and decentralized finance (DeFi) projects using simple conversational prompts.
Anatoly Yakovenko, the co-founder and CEO of Solana Labs, emphasized the significance of this development in an interview published on Solana’s website. He stated, “Every developer building consumer-oriented apps should be thinking about how their app is going to be interacted with through an AI model because this is a new paradigm for telling computers what to do.”
Currently, the ChatGPT plugin allows users to purchase NFTs, transfer tokens, inspect transactions, interpret public account data, and even discover NFT collections based on floor prices.
Impressed by this achievement, the Solana Foundation has substantially increased its grant funding from the initial commitment of $1 million to $10 million to encourage further innovation and exploration of possibilities involving the Solana blockchain and AI.