MicroStrategy, the largest corporate Bitcoin holder, could be on the hook for federal income taxes on its unrealized crypto gains due to the Inflation Reduction Act of 2022. The law’s corporate alternative minimum tax (CAMT) provision imposes a 15% minimum tax on certain corporations’ adjusted earnings, including unrealized gains on assets like Bitcoin. The company currently holds over 450,000 BTC—worth more than $48 billion—with an estimated $19.3 billion in unrealized gains. Despite these figures, MicroStrategy has never sold any of its Bitcoin holdings. Michael Saylor, MicroStrategy’s executive chairman, previously faced scrutiny over tax issues. In June 2024, MicroStrategy settled a tax fraud lawsuit for $40 million, following allegations from the D.C. attorney general that Saylor avoided paying district income taxes for at least a decade. Interestingly, Saylor shared a misleading post on October 30, attributing a quote to Donald Trump that falsely stated, “Bitcoin is money” and suggested a tax-free stance on crypto. Saylor’s personal Bitcoin holdings are also substantial. He revealed in a 2020 tweet that he acquired 17,732 BTC at an average price of $9,882. At current prices, his holdings are worth over $1.8 billion, placing him among the top Bitcoin addresses. Growing focus on crypto taxation Both MicroStrategy and Coinbase criticized the CAMT framework. In a January letter to lawmakers, they argued that the tax on unrealized crypto gains would create “unjust and unintended tax consequences” for companies holding substantial digital assets. The letter urged the U.S. Treasury and IRS to exclude unrealized crypto gains from the adjusted financial statement income used to calculate CAMT liability. The pushback highlights concerns that applying CAMT to crypto could discourage companies from holding digital assets on their balance sheets. While MicroStrategy and Coinbase advocate for changes to the rules, the IRS may consider exemptions under President Trump’s more crypto-friendly administration. These developments come as the IRS tightens its focus on cryptocurrency. In June 2024, the agency introduced new guidelines requiring centralized exchanges to report digital asset sales starting in 2025. This move aims to improve tax compliance among crypto investors but has also drawn criticism. The Blockchain Association, for instance, filed a lawsuit against the IRS last year, arguing that the reporting requirements could raise constitutional questions.  

US dollar weakened due to domestic policies, mixed economic data, and external pressures, while PMI trends shaped currencies, boosting gold. US Dollar Weakness and Contributing Factors The US dollar faced significant weakening due to a combination of domestic policies, economic data, and external developments. Trump’s statements had a notable impact on the US dollar. His comment about preferring not to impose tariffs on China eased trade tensions, which reduced the dollar’s appeal as a safe-haven asset. At the same time, Trump’s public call for immediate interest rate cuts by the Federal Reserve added to the downward pressure on the dollar, as markets priced in the likelihood of monetary easing. The US economic picture was further clouded by mixed Purchasing Managers’ Index (PMI) results. While the Manufacturing PMI slightly exceeded expectations by climbing to 50.1, the Services PMI fell short of forecasts, dropping to 52.8. This disparity signaled ongoing economic uncertainty, which weakened investor confidence in the dollar. Adding to the dollar’s struggles was the Bank of Japan’s unexpected interest rate hike. This decision increased the appeal of the Japanese yen, putting additional pressure on the US dollar and further dampening its value relative to currencies with rising interest rates. Global PMI Data and Currency Movements PMI data from various regions played a crucial role in shaping global currency movements, reflecting differing levels of economic performance. The Eurozone demonstrated resilience with upbeat preliminary PMI data. The Composite PMI rose to 50.2, signaling growth in the region. Germany, the Eurozone’s economic powerhouse, showed significant improvement in its PMI figures, which strengthened the euro against the weakening US dollar. In the United Kingdom, the PMI data outperformed expectations, with the Composite PMI climbing to 50.9. This stronger-than-expected reading bolstered the pound sterling, further eroding the US dollar’s position in currency pairings. In contrast, the US PMI data painted a mixed picture. While the Manufacturing PMI indicated modest growth, the underwhelming Services PMI reflected economic challenges. This divergence added to the dollar’s weakness and highlighted the economic uncertainties facing the US. Gold’s Surge Amid Dollar Weakness Gold prices soared to near all-time highs, reflecting its status as a safe-haven asset during times of uncertainty and dollar weakness. The declining value of the US dollar made gold more attractive to investors holding other currencies. As the dollar weakened, gold’s relative value increased, boosting demand. Trump’s remarks about avoiding tariffs on China contributed to easing global trade tensions, reducing risk aversion. This, paradoxically, also supported gold prices, as it remained a preferred safe-haven asset in an environment of uncertainty. Expectations of further interest rate cuts by the Federal Reserve provided additional support for gold. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it a more attractive investment.     Top economic events for next week: January 27, 2025, 01:30:00 – NBS Manufacturing PMI (CNY) – HIGH: This Purchasing Managers’ Index (PMI) provides a key snapshot of manufacturing activity in China. A reading above 50 indicates expansion, while below 50 signals contraction. Given China’s role in the global economy, this data has significant implications for global trade and economic growth. January 27, 2025, 01:30:00 – NBS Non-Manufacturing PMI (CNY) – HIGH: Similar to the manufacturing PMI, this index focuses on the service sector in China. This is crucial as the service sector is an increasingly important part of the Chinese economy. January 28, 2025, 09:00:00 – ECB Bank Lending Survey (EUR) – HIGH: This survey provides insights into lending conditions in the Eurozone. Changes in lending standards, loan demand, and credit terms can significantly impact economic activity and are closely watched by the European Central Bank (ECB). January 29, 2025, 00:30:00 – Consumer Price Index (CPI) (AUD) – HIGH: This measures the change in prices of goods and services purchased by households in Australia. CPI is a key indicator of inflation and influences the Reserve Bank of Australia’s (RBA) monetary policy decisions. The multiple readings (QoQ, YoY, Trimmed Mean) provide a comprehensive view of inflation trends. January 29, 2025, 14:45:00 – BoC Interest Rate Decision/Monetary Policy Report/Statement/Press Conference (CAD) – HIGH: The Bank of Canada’s interest rate decision and accompanying communications are major events for the Canadian dollar. Changes in interest rates directly impact borrowing costs and influence economic activity. The policy report and press conference provide further context and insights into the central bank’s outlook. January 29, 2025, 19:00:00 – Fed Interest Rate Decision/Monetary Policy Statement/FOMC Press Conference (USD) – HIGH: The Federal Reserve’s interest rate decision is arguably the most important economic event globally. Changes in US interest rates have far-reaching effects on global financial markets, capital flows, and exchange rates. The accompanying statement and press conference provide crucial insights into the Fed’s economic outlook and future policy direction. January 30, 2025, 09:00:00 – Gross Domestic Product (GDP) (EUR) – HIGH: GDP is the broadest measure of economic activity. This release provides a comprehensive look at the Eurozone’s economic performance and is a key indicator of economic health. January 30, 2025, 10:00:00 – Gross Domestic Product s.a. (QoQ/YoY) (EUR) – HIGH: Similar to the previous GDP release, this one offers seasonally adjusted figures, providing another key insight into Eurozone economic performance. January 30, 2025, 13:15:00 – ECB Main Refinancing Operations Rate/Monetary Policy Statement/Rate on Deposit Facility (EUR) – HIGH: The ECB’s interest rate decision and accompanying statement are crucial for the Eurozone. Like the Fed’s decision, it has a significant impact on financial markets and the Euro. January 30, 2025, 13:30:00 – Gross Domestic Product Annualized (USD) – HIGH: The US GDP release provides a comprehensive measure of the US economy’s performance. It’s a key indicator for investors, businesses, and policymakers   The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff. The information does not constitute advice or a recommendation on any course of action and does not take into account your personal circumstances, financial situation, or individual needs. We strongly recommend you seek independent professional advice or conduct your own independent research before acting upon any information contained in this article.

David Balland, a co-founder of French cryptocurrency firm Ledger, and his partner have been safely freed after being kidnapped and held for ransom. The Paris prosecutor’s office confirmed that Balland was abducted early Tuesday from his home in central France and taken to another location. The kidnappers demanded a “large ransom in cryptocurrency,” though authorities did not disclose the exact amount or if it was paid. Balland was released on Wednesday, receiving medical attention from emergency services. His partner was later freed by GIGN, France’s elite tactical police unit. No arrests have been reported, and further details about the operation remain undisclosed. The case has drawn attention to Ledger, a leading producer of hardware wallets for storing crypto assets. Founded in 2014, the company is valued at $1.5 billion after a 2021 funding round. The incident also highlights ongoing concerns about organized crime and the misuse of cryptocurrency in illicit activities. France has seen a rise in high-profile criminal acts, including last year’s dramatic prison van ambush that freed a convicted drug boss. In November, the body of Canadians crypto influencer Kevin Mirshahi was discovered at Île-de-la-Visitation park in Montreal, following his abduction from a condo in June. Mirshahi’s death is not the only recent crypto-linked abduction in Canada. A weak earlier, WonderFi CEO Dean Skurka was briefly kidnapped in Toronto and released after paying nearly $720,000 in ransom. Canada, like other parts of the world, has recently seen a disturbing trend of violent incidents connected to cryptocurrency. A list maintained by Casa’s Chief Security Officer, Jameson Lopp, documented 18 cryptocurrency-related attacks this year alone, including in-person scams, home invasions, and even murders. Mirshahi was known in Montreal’s crypto community and previously operated a private investment firm, “Crypto Paradise Island.” However, allegations of misconduct surrounded him, with several individuals accusing him of scamming investors. The crypto community has seen several incidents of violence and unexplained deaths over the years. Bitcoin cypherpunk Jameson Lopp advises against conducting peer-to-peer trades with untrusted individuals, showing off wealth on social media, and wearing crypto-branded clothing. He stresses that minimizing criminals’ awareness of one’s crypto involvement can reduce the chances of being targeted.

GBPUSD currency pair can be expected to rise to the next resistance level 1.2750 (which reversed the price at the end of last year). – GBPUSD reversed from long-term support level 1.2110 – Likely to rise to resistance level 1.2750 GBPUSD currency pair recently reversed up with the weekly Japanese candlesticks reversal pattern Doji from the strong support zone located between the long-term support level 1.2110 (which started the weekly uptrend at the end of 2023, as can be seen from the weekly GBPUSD chart below) and the lower weekly daily Bollinger Band. The upward reversal from this support zone stopped the previous primary downward impulse wave 3 from the end of 2024. Given the oversold weekly Stochastic, the strength of the aforementioned support zone, bearish US dollar sentiment coupled with the strongly bullish Sterling sentiment seen across the FX markets today, GBPUSD currency pair can be expected to rise to the next resistance level 1.2750 (which reversed the price at the end of last year). GBPUSD Technical Analysis The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff. The information does not constitute advice or a recommendation on any course of action and does not take into account your personal circumstances, financial situation, or individual needs. We strongly recommend you seek independent professional advice or conduct your own independent research before acting upon any information contained in this article.

The UAE Securities and Commodities Authority (SCA) has initiated a significant step towards modernizing the financial landscape by releasing a draft regulation for robo-advisor services. The SCA invites stakeholders, experts, and industry participants to provide feedback on the draft. The aim is to finalize a regulation that reflects the needs of the market while ensuring robust investor protection. The regulation, accessible on the SCA’s official website, outlines provisions for automated, algorithm-driven platforms offering investment advice and portfolio management services. By leveraging advanced algorithms, these platforms analyze market trends, allocate assets, and adjust portfolios based on client information, market conditions, and individual risk profiles. The proposed rules aim to embed high-quality service standards and safeguard mechanisms into the operational framework of robo-advisor platforms. These provisions are designed to foster innovation while adhering to the UAE’s broader ambition of becoming a global economic hub by 2031. The initiative aligns with the government’s ‘We the UAE 2031’ vision, promoting transformative projects that enhance competitiveness and deliver impactful cross-sectoral benefits. This move builds on the UAE’s history of proactive financial regulation aimed at fostering innovation and economic growth. In recent years, the SCA has introduced guidelines for crypto-asset trading, tightened anti-money laundering controls, and supported fintech startups through regulatory sandboxes. In 2023, the UAE established comprehensive guidelines for virtual asset service providers, positioning itself as a leading jurisdiction for digital finance. Additionally, the country’s emphasis on adopting cutting-edge technologies, such as blockchain, has paved the way for initiatives like the current robo-advisor regulation. Sky Links secured SCA Category 5 license in UAE Earlier this week, Sky Links Capital Group announced the acquisition of a Securities and Commodities Authority (SCA) license in the United Arab Emirates. The license, classified as SCA Category 5 (Arrangement and Advice), enhances Sky Links Capital’s ability to deliver financial services to individual traders, corporations, and institutional clients. Sky Links Capital is a Dubai-headquartered multi-asset financial service firm led by former BDSwiss MENA CEO Daniel Taki Eddine.The SCA license allows the broker to expand its portfolio of financial services while reinforcing its reputation for transparency and compliance. The company plans to leverage this regulatory endorsement to deliver enhanced trading conditions and broaden its client base. Takieddine praised the team’s dedication in securing the license and their shared vision of driving innovation in the financial markets. Sky Links Capital offers a diverse portfolio of financial products, including equities, commodities, forex, cryptocurrencies, and exchange futures. The firm has distinguished itself with customer-centric services, advanced trading platforms, and strong risk management tools. The broker recently partnered with Centroid Solutions to enhance the trading experience for clients while improving liquidity distribution across financial markets. The collaboration will enable Sky Links to provide its clients with enhanced trading capabilities, real-time analytics, and improved decision-making tools as part of the brokerage firm’s strategy to expand its global footprint. The integration brings enhanced liquidity access, real-time risk management, and streamlined execution to Sky Links Capital’s trading platforms. Clients will benefit from optimized order execution, robust connectivity to leading liquidity providers, and a more comprehensive suite of trading tools. Sky Links Capital Group, which is also licensed in FSC Mauritius (License No. GB24202837) and registered with the St.Vincent and Grenadines (Reg No. 3698), is a multi-asset brokerage firm offering exposure to a diverse range of assets including equities, bonds, commodities, and currencies.

THORChain, a decentralized protocol that enables crosschain swaps, has temporarily suspended its Bitcoin and Ether lending and savings programs. The move was approved by network node operators and is said to help avert insolvency and restructure the protocol’s $200 million in liabilities. Orion, a pseudonymous THORChain developer, announced on the project’s Discord that the pause would last for 90 days. Swaps will continue uninterrupted, but the halt seeks to protect network stability and allow the community to craft a recovery plan. THORChain is a decentralized liquidity protocol that offers crosschain swaps to enable users to trade assets like Bitcoin and Ether without relying on centralized intermediaries. Liquidity pools supported by users’ deposits serve as the backbone for these trades. THORChain’s native token, RUNE, plays a crucial role in keeping liquidity and settling transactions. The now-paused ThorFi lending and savers programs offered users the chance to earn yields on BTC and ETH deposits or to borrow against their holdings. With liabilities mounting and the risk of a “run” on the protocol looming, the temporary suspension is intended to prevent a cascade of liquidations and stabilize THORChain’s financial position. The decision sparked a range of reactions. Some community members believe the protocol has the capacity to service its debts once a new plan is in place. Others likened the situation to a Chapter 11 bankruptcy and called for a collaborative approach to preserve the protocol’s value. Notable industry figures, such as ShapeShift founder Eric Voorhees, acknowledged that while the suspension was necessary, it highlights the risks of the experimental lending and saving models that have now proven unsustainable. Voorhees noted that these features had been flagged as high-risk long before the current suspension. Despite these challenges, THORChain’s core decentralized exchange functionality remains operational, allowing liquidity providers to continue deposits and withdrawals. However, the price of RUNE fell by 32%, reflecting market concerns about the protocol’s financial health. THORChain’s development team has yet to publicly comment on the next steps, but the community has 90 days to propose a plan for addressing the liabilities and restoring confidence in the network.

Eurex Clearing has announced the launch of a Distributed Ledger Technology (DLT)-supported collateral mobilization service. With regulatory non-objection from Germany’s Federal Financial Supervisory Authority (BaFin), the service is set to roll out in Q2 2025. This initiative aims to streamline the management of securities collateral, making it instantly accessible and transferable regardless of physical location. DLT-supported collateral mobilization powered by HQLAX and Clearstream The service is being developed in collaboration with HQLAX and Clearstream, with J.P. Morgan acting as the pilot clearing member. Eurex Clearing clients will be able to mobilize collateral via custodians and central securities depositories (CSDs) on the HQLAX digital ledger, enabling efficient and cost-effective fulfillment of margin requirements set by central counterparties (CCPs). Matthias Graulich, Member of the Executive Board at Eurex Clearing, said: “With this offering Eurex Clearing once again pioneers and upholds its status as the innovator in the CCP space. Eurex Clearing continues to invest in such advanced services, reflecting its commitment to providing cutting-edge solutions and services to its clients.” Helen Gordon, Global Head of Derivatives Clearing at J.P. Morgan, remarked: “J.P. Morgan early on identified the benefits of using traditional assets in digital form to move cleared derivatives collateral and is pleased to see this regulatory milestone achieved. We look forward to the next phase of implementation and realizing the risk and optimization benefits associated with improved collateral mobility for us and our clients.” Guido Stroemer, Co-founder and CEO of HQLAX, commented: “We are pleased to support Eurex Clearing in this pioneering initiative, which leverages our DLT platform to enhance collateral mobility and security for cleared margin.” Marton Szigeti, Head of Collateral, Lending & Liquidity Solutions at Clearstream, added: “We are thrilled that our colleagues from Eurex Clearing add the central clearing element to HQLAX’s collateral offering, further strengthening Deutsche Börse Group’s engagement. This collaboration underscores Clearstream’s commitment to providing efficient collateral solutions, shaping a secure digital financial landscape.”

The World Federation of Exchanges (WFE), representing over 250 market infrastructures, has announced its priorities for 2025. These were decided by the WFE Board, comprising 18 market infrastructure leaders, during a recent meeting. The focus areas include market transparency, ESG leadership, technological innovation, and regulation of public and private markets. The WFE plans to advocate for regulations ensuring fairness in all trading environments. It will focus on aligning incentives for listing and trading transparently. The organization aims to protect investors and reinforce the value of regulated marketplaces. “We will continue to champion the sustainable growth of public markets” Nandini Sukumar, CEO of the WFE, said, “We will continue to champion the sustainable growth of public markets and collaborate with stakeholders to ensure their ongoing health and robustness, given their important economic and social role to the global economy.” The WFE will promote Environmental, Social, and Governance (ESG) practices by providing practical guides for securities issuers and derivatives markets. The organization intends to support industry-wide adoption of clear ESG disclosures and transitions. Technological innovation remains central. The WFE will work with regulators to address the use of Artificial Intelligence in market operations, focusing on security and resilience. Efforts will aim to enhance technological standards while protecting market participants. The WFE will also examine the relationship between public and private markets. With private markets becoming more accessible, the organization seeks to optimize their interaction with public markets. The goal is to highlight the advantages of public, regulated trading systems. The WFE plans to address changes affecting clearinghouses and central counterparties (CCPs). It will advocate for CCPs amidst new regulations impacting margin practices and clearing operations. The organization will ensure the voice of CCPs is heard in policy discussions. The WFE’s Market Infrastructure Certificate program will continue into its third year. The organization aims to meet the educational needs of future industry leaders. The program will provide insights into market structures and operations. The WFE will collaborate with regulators and stakeholders to promote robust, transparent, and resilient market structures. It will work to ensure efficient market operations that meet the needs of issuers, investors, and participants. The priorities reflect the WFE’s commitment to safeguarding market integrity, fostering transparency, and supporting sustainable growth. The organization will engage with industry participants to strengthen trust in global markets.

Spread betting and CFDs broker IG Group today reported strong interim results for the six months ended Nov. 30, 2024, with revenue and profit growth driven by favorable market conditions. The online trading platform’s total revenue of £522.5 million, up 11% from £472.6 million in the same period last year. Net trading revenue rose 12% to £451.7 million, supported by higher revenue per client, while net interest income remained flat at £70.8 million. Adjusted profit before tax increased by 30% to £266.8 million, with a margin of 51.1%, compared to £205.7 million and 43.5% in H1 FY24. Statutory profit before tax grew by 41% to £249.3 million, while adjusted basic earnings per share rose 42% to 55.3 pence. IG Group announced an interim dividend of 13.86 pence per share, up from 13.56 pence, and extended its share buyback program by £50 million to a total of £200 million, to be completed in the second half of FY25. Earlier this month, IG acquired UK-based Freetrade, a British competitor to the popular stock trading app Robinhood.  The deal values Freetrade at $195 million, a 29% discount from its previous valuation. Despite the acquisition, the app will continue to operate independently under its own brand. Meanwhile, IG exited non-performing initiatives, including the Spectrum multilateral trading facility to focus on its core products with a more cost-efficient over-the-counter model. Spectrum, which was broadly breakeven in H1 FY25, is being wound down. Total active clients decreased slightly to 295,300, from 296,300 in the prior year. First trades remained flat at 33,900. Meanwhile, tastytrade, IG’s U.S.-based trading platform, reported a 15% revenue increase, achieving a record $90.5 million in trading revenue, with stable interest income of $45.3 million. Operating costs fell by 1% to £277.4 million, while statutory profit after tax rose by 42% to £188 million, and basic earnings per share increased by 55% to 51.7 pence.

South Korean cryptocurrency exchanges Upbit and Bithumb announced compensation plans for users affected by unexpected service downtime on December 3, 2024, the day President Yoon Suk Yeol declared nationwide martial law. The declaration, which was made in response to escalating political tensions, triggered a rush of trading activity that temporarily crashed the servers of major local exchanges. Upbit, typically hosting 100,000 concurrent users, saw traffic balloon to 1.1 million users within hours of the martial law announcement. Bithumb and Coinone similarly reported user spikes of over 500,000 each. This sudden influx overwhelmed their infrastructure, causing trading service outages. Upbit reported 99 minutes of downtime, while Bithumb and Coinone experienced 62 and 40 minutes of service disruption, respectively. As a result, Upbit plans to pay out 3.14 billion Korean won ($2.1 million) in compensation, covering 596 reported cases. Bithumb will pay 377.5 million won ($262,000) across 124 cases. Both exchanges may increase their payouts once negotiations with affected investors are finalized. Other exchanges, including Coinone, Korbit, and Gopax, have reportedly not committed to compensating users. South Korea’s financial authorities resumed inspections of crypto exchanges to prevent future service outages. Exchanges are now being urged to expand server capacity, adopt cloud solutions, and refine their emergency response plans. A spokesperson from the Financial Supervisory Service confirmed ongoing checks to ensure that these measures are properly implemented and that compensation standards are clearly established. South Korean traders also have a reputation for driving euphoric rallies and exerting massive influence on crypto prices, contributing to increased buying pressure. Trading volumes on Upbit often surpass those of major global exchanges like Binance and Coinbase, which reflects the immense activity and capital within the country’s crypto market. Earlier in July, South Korea’s right-wing political party proposed delaying the taxation of cryptocurrency gains by three years. If passed, the country’s crypto gains taxation will be pushed back from the beginning of 2025 to 2028. A 20% taxation on crypto gains was initially scheduled to take effect on Jan. 1, 2022, but has been pushed back twice so far to Jan. 1, 2025, due to heavy backlash from investors and industry experts.

EURUSD currency pair can be expected to fall to the next support level 1.03400, former minor resistance from the start of this month. – EURUSD reversed from resistance zone – Likely to fall to support level 1.0340 EURUSD currency pair recently reversed down from the resistance area located between the key resistance level 1.0430 (which has been reversing the price from December, as can be seen from the daily EURUSD chart below), upper daily Bollinger Band and the 61.8% Fibonacci correction of the downward impulse from the start of December. The downward reversal from this resistance zone stopped the previous minor ABC correction ii from the start of January. Given the clear daily downtrend, bullish US dollar sentiment seen across the FX markets and the overbought daily Stochastic, EURUSD currency pair can be expected to fall to the next support level 1.03400, former minor resistance from the start of this month. The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff. The information does not constitute advice or a recommendation on any course of action and does not take into account your personal circumstances, financial situation, or individual needs. We strongly recommend you seek independent professional advice or conduct your own independent research before acting upon any information contained in this article.

FinanceFeeds presents an exclusive interview with Alex Shevchenko, CEO and co-founder of Aurora, revealing insights into how Virtual Chains are revolutionizing blockchain development and shaping the future of a multichain ecosystem. 1.The Aurora Cloud Console is said to make it simple for anyone to create their own Layer-1 blockchain, and you have previously stated you want to get more than 1,000 Virtual Chains up and running this year. But why do we need so many blockchains? Will every crypto/Web3 project benefit from having its own blockchain? Every ambitious founder wants to launch a chain. They seek to build their own community and they need dedicated spaces for them. Products naturally evolve into platforms, and blockchains are key to making that happen. We’ve seen this happening many times: with Coinbase (product) launching Base (blockchain), Uniswap (product/protocol) launching Unichain (blockchain). 2.Your Virtual Chain architecture operates as a set of smart contracts on NEAR Protocol. Why choose to build on NEAR? What advantages does it provide in terms of speed, scale and decentralization? Virtual chain architecture makes sense to be developed only on the hyper-scalable blockchains with sharding or parallel contract execution. In 2021, NEAR stood out as the first blockchain to deliver a robust implementation of this approach. Since then, NEAR has consistently demonstrated technology excellence: it had zero downtime while performing more than 50 hardforks. NEAR allows us to have very fast transaction finality (2 seconds), low and predictable transaction prices (below $0.01, with almost no gas price volatility due to its scalability) and a shared decentralized sequencing of transactions (NEAR Nightshade consensus algorithm, which effectively is a sequencer for all Aurora Chains; at the moment, NEAR is run by more than 250 validators). 3. Aurora wants to build a future where many projects will have their own, independent blockchains. But we live in a “multichain world”, according to just about every crypto expert. So how will you handle cross-chain interoperability, not only between different Virtual Chains but also other networks like Ethereum, Solana, Bitcoin etc? We’ve made significant contributions to the cross-chain interoperability space and I can say that NEAR is leading the way in cross-chain technologies. Starting with Chain Signatures – the primitive that allows NEAR contracts and accounts to hold keys (which might be the keys from accounts on other blockchains). We also contributed to the Omni-bridge (cross-chain messaging and liquidity bridging protocol) and used it as a deposit mechanism into NEAR Intents (a universal liquidity layer, that supports swaps between 10+ blockchains including Bitcoin, Ripple, Doge, Ethereum, Solana and others). NEAR and Aurora Mainnet have also integrated many third-party cross-chain solutions such as Wormhole, Layer Zero, Axelar, as well as deBridge, Anyswap bridge, Li.Fi and many others. One of the important things to mention is that all these technologies, as well as others, are available after deployment through Aurora Cross-Contract Calls SDK from the first block. This is the core innovation behind the Virtual Chain concept – they can reuse all the infrastructure available on the mother chain and other Virtual Chains, which ensures interoperability and network effects. 4.Blockchains cannot survive without an ecosystem of services, such as wallets, exchanges, block explorers, messaging protocols, network bridges, governance mechanisms, launchpads, NFTs etc. How does Aurora provide these essential services and capabilities to its Virtual Chains? Aurora started with the development of one Virtual Chain called Aurora Mainnet. Over the past 3 years, it has successfully integrated more than 200 dApps and infra projects. Besides that, the NEAR Protocol has added numerous project integrations as well which further enhances the ecosystem. Once deployed, all these integrations become accessible  to Virtual Chains, allowing for an interconnected network. 5. A lot has been said about the potential of combining AI and AI agents with blockchain. But why does AI need to be on-chain, and how will Aurora help drive this trend? The NEAR Protocol stands out as a leading blockchain for various AI applications, so there’s a lot of innovation happening in the NEAR and Aurora ecosystems in regards to AI. Blockchain can enhance existing AI use cases with multiple key features. First, blockchain can serve as a decentralized payment and invocation layer for LLMs. Second, utilizing Trusted Execution Environments (TEEs) enables the distribution of LLMs without worrying about illegal copying or usage – the ultimate arbiter for inference would be a blockchain, and it would hold the payment information for the model. Third, blockchain can facilitate verifiable training processes. This also requires the integration of TEEs to maintain data integrity.  And finally, blockchain can provide provable inference — models running in TEEs can authenticate their outputs. All of these advancements can create a world where AI models will be open-sourced and provably trained while maintaining the means for monetization. This shift could lead to user-owned AI systems that serve as alternatives to those controlled by states or big corporations, removing threats associated with centralization such as censorship of inference, hidden modification of inquiries, post-processing of the outputs, illegal data usage for ML, etc. I can proudly say that Aurora is one of the main contributors to this vision. 6. Many in the crypto community are very optimistic about the return to office of Donald Trump, who is said to be the most “crypto-friendly” president ever. Do you agree with this optimism? If so, why is (or why isn’t) Trump good for crypto and what kind of impact will his presidency have on the industry? Trump has proven to be very vocal about crypto, but quite weighted in his actions. So, we need to see what he will actually do as time passes. However, even now, after the launch of $TRUMP and $MELANIA, crypto transitioned from being a marginal vertical into a mainstream and normalized reality. Just because the U.S. President is the one who dictates the norm to the whole world. That’s why I think we are entering the age of innovation in the crypto space. 7. What do you think will be the biggest trends in crypto this year to watch out for? And why? I think we will see lots of progress in the multichain space – more tools helping devs to make users forget which chain they are using and whether they are using a chain or not in general. And also, more TradiFi / institutional integration into crypto – more ETFs will be issued, perhaps, derivative products on top of these ETFs will be launched, etc. As I said, crypto is a norm right now, so anyone can do normal things to it too. 8. What do you think will be the biggest crypto-related surprise this year? Unfortunately, I expect a massive fallout event happening during this year that will start the bear market. Something like a $LUNA crash in 2021. It’s hard for me to say what it will be, but one of the options is a major hack of trading terminal/bots on Solana — these are the ticking bomb, because of the model of their operation (they are custodial). 9. What does Aurora Labs have planned for the future? Where will the company be in five years’ time? Our direction is very clear and straightforward — we are making blockchain infrastructure simple and convenient. And we are not stopping the innovation in this direction. As some people say in crypto, the first bear market for a company is the worst, but if it survives, it will flourish. We survived. Now we see close to a hundred projects willing to launch their chains with our solution. We noticed an increase of interest in NEAR Intents. We see that NEAR Intents has synergies with Virtual Chains, and founders love it. And we see that one by one people start to understand that L2s are the answer to the question of L1 scalability; but not a good answer to the question of how to launch a chain. And Virtual Chains are. Anyone who’s interested in exploring Virtual Chains further can check out https://auroracloud.dev/ and get his Virtual Chain delivered for free in less than 2 days (with all the necessary infrastructure). Alex Shevchenko is the CEO and co-founder of Aurora, a network of Virtual Chains designed to simplify and supercharge blockchain development. Under Alex’s leadership, Aurora has redefined EVM compatibility by providing fully customizable chains that run as smart contracts on NEAR Protocol. His background includes over a decade of experience in blockchain innovation, including leading the development of Exonum at Bitfury and contributing to NEAR Protocol’s groundbreaking scalability solutions. Alex’s vision for Aurora extends beyond Ethereum compatibility, creating a foundation for a multichain future driven by high-performance technology.

Indian cryptocurrency exchange WazirX received approval from the Singapore High Court for its restructuring plan, which seeks to repay customers affected by a major cyberattack in July 2024. The court’s decision enables WazirX to move forward with recovering user funds and preventing liquidation. WazirX’s parent company, Zettai, filed the restructuring proposal under the Singapore Companies Act 1967. The plan allows the exchange to repay users through a combination of direct token distributions and a newly introduced recovery token system. WazirX estimates that users could recover up to 80% of their account balances. According to the court, WazirX was not found to have committed any misconduct in relation to the attack. The judgment explains that the restructuring is preferable to liquidation, with the court noting that it provides a faster resolution and better outcomes for affected users. The plan is structured under a Singapore Scheme of Arrangement, which facilitates agreements between companies and their creditors. WazirX will conduct a user vote and independent audit in the coming months. If approved by the majority, payouts will begin within 10 days. Initial distributions will include liquid assets, and recovery tokens will cover any remaining claims. These tokens are tied to future platform profits, allowing users to benefit as the exchange generates revenue and recovers additional stolen assets. WazirX has already frozen $3 million in USDT tied to the attack and continues to collaborate with authorities in the U.S., Japan, and South Korea to recover more funds. As part of its long-term strategy, the exchange plans to launch a decentralized trading platform, which will help generate additional revenue for repurchasing recovery tokens. Zettai also committed to a three-year buyback program to further repay users. In November, Delhi Police arrested a suspect from Bengal involved in the $235 million hack. WazirX cooperated with the investigation by providing necessary hardware, KYC records, and transaction logs. The Indian Cyber Crime Coordination Centre (IFSO) independently confirmed that WazirX’s security measures remained uncompromised, as the hack stemmed from external deception. The hacker moved stolen funds using the U.S.-sanctioned crypto mixer Tornado Cash. Onchain analytics platform Arkham reported that more than 61,500 ether ($161 million) has been transferred to the mixer so far. Amid the fallout, WazirX founder Nischal Shetty  repeatedly shifted blame for the hack. Initially, Shetty claimed that a mistake by custodian Liminal led to the breach—a claim that Liminal denied. In August, Shetty shifted focus, suggesting that Binance, which he said held a majority of WazirX parent Zettai Labs’ funds, restricted WazirX’s ability to repay affected customers. Forn its part, Binance has distanced itself from WazirX, reiterating last week that it does not own, control, or operate the exchange. Binance claimed that a contract between the two companies was never finalized due to “Zettai’s failure to perform its obligations.”  

TMX Group has announced the launch of AlphaX US, a new Alternative Trading System (ATS) designed to focus on execution quality for US-listed securities. The platform is TMX Group’s first venture outside Canada under its Markets division and is now operational for FINRA-registered broker-dealers. Trading in Regulation NMS common stock, ETFs, American depository receipts Heidi Fischer, President of TSX Alpha US, said, “After continuous consultation with our clients, we are proud to introduce AlphaX US, a venue that is focused on execution performance, and provides innovation and ease to the broker-dealer community. There are several unique offerings within AlphaX US, and we have combined that functionality with a model that provides easy implementation, customization, and strong analytics for our partners. It’s through feedback and collaboration with our stakeholders that we are able to deliver solutions that make markets better.” Luc Fortin, Global Head of Trading at TMX Group, said, “One of our top priorities is solving for the business needs of our clients. We are excited to embark on this next chapter of growth for TMX to build upon.” AlphaX US offers trading in all Regulation NMS common stock, exchange-traded funds, and American depository receipts. The system matches trades during regular U.S. market hours while allowing order entry 60 minutes before the opening. TMX aims to provide a streamlined, customizable experience with analytics-driven insights for participating brokers. TMX Group has consistently sought to innovate and expand its reach across financial markets. As the operator of the Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV), the company has introduced several new platforms and technologies to enhance market performance and accessibility. In 2024, TMX Group launched initiatives to improve execution efficiency on its Canadian platforms, including TSX Alpha Exchange. These efforts included advanced order matching technologies and analytics tools tailored to institutional traders. Additionally, TMX Group has been proactive in enhancing transparency and compliance standards. Its regulatory framework for Canadian markets is seen as a model for operational excellence, and the company has leveraged this expertise to support its expansion into the U.S. equities market. With the introduction of AlphaX US, TMX Group aims to replicate its Canadian success in the United States.

Nasdaq and Boston Consulting Group (BCG) have published a report detailing the significant efficiency gains banks could achieve by modernizing their risk and compliance functions. According to the study, titled The New Growth Imperative: Cutting through Complexity in the Financial System, the banking sector could unlock between $25 billion and $50 billion in annual savings by addressing inefficiencies in these areas without sacrificing effectiveness. “We are at an inflection point” Adena Friedman, Chair and CEO of Nasdaq, said, “Financial institutions are particularly exposed to the exponential growth in complexity across the global economy, from the evolution of technology paradigms to the expectation of real-time finance and the explosion of data. The good news is that as both external complexity and internal complicatedness have grown, so have the solutions to help manage them. By leveraging modern technology and embracing a systems-based approach, we can unlock significant efficiencies and foster a more resilient and innovative ecosystem towards the dual goal of resilience and growth.” Christoph Schweizer, CEO of BCG, commented, “We are at an inflection point. The dramatic increase in complexity in business operating environments, furthered by advances in technology over the past decade, is adding cost and friction to our financial system. Our research highlights significant opportunities for efficiency gains with equal or greater effectiveness and improved performance outcomes that could unlock up to $1 trillion of lending capacity.” The report also emphasizes the role of technology in reducing complexity and increasing operational efficiency. It highlights a growing preference among financial institutions for strategic partnerships with technology providers rather than in-house development, with only 22% of industry professionals favoring internal solutions. In recent years, Nasdaq and BCG have partnered on various initiatives aimed at addressing challenges in the financial system. Their 2023 report explored the rise of digital transformation in banking, underscoring the importance of integrating advanced technologies like AI and blockchain into legacy systems. The report predicted that digital infrastructure upgrades could lead to a 15% reduction in overall operating costs. Nasdaq has consistently advocated for innovation-driven approaches to combat financial crime and cyberattacks. In 2024, the organization launched a new compliance monitoring platform designed to streamline regulatory reporting for financial institutions. This platform has since been adopted by over 30 banks worldwide. BCG, on its end, has highlighted the growing costs of non-compliance in multiple studies. A 2022 survey by the consultancy firm revealed that banks collectively paid over $200 billion in regulatory fines in the previous decade, emphasizing the urgent need for streamlined risk and compliance processes.

Adclear, a RegTech startup focused on transforming marketing compliance for fintech businesses, has raised £510,000 in pre-seed funding. The investment round was led by Haatch, Force Over Mass, and Founders Capital and will support Adclear’s mission to automate compliance processes for financial services marketing. Adclear’s AI-powered platform addresses the challenges faced by rapidly scaling fintechs operating under strict Financial Conduct Authority (FCA) regulations. The platform is already being utilized by high-profile fintech companies, including Plum, Creditspring, and Trade Nation, to streamline marketing compliance workflows. Compliance evaluations in real-time, providing instant, contextual feedback Joe Jordan, Co-Founder of Adclear, said: “Our experience in financial services and regulated marketing means we understand this problem first-hand. Our focus is delivering a product that enables teams to spend more of their time on the most important parts of their business.” Fred Soneya, General Partner at Haatch, commented: “Adclear addresses a critical pain point in the regulatory compliance landscape for financial services. As both investors and users of their platform for our marketing materials, we’re particularly excited to support their growth journey.” Adclear’s platform automates compliance evaluations in real-time, providing instant, contextual feedback. By centralizing workflows, the platform eliminates the need for disjointed tools, enabling fintech businesses to scale without compromising compliance. The platform reduces compliance review times from days to hours and provides tailored compliance checks for marketing campaigns across various regulatory categories, including FX, CFDs, spread betting, and crypto. The firm offers versatility for integration with platforms like Audiostack to ensure marketing materials meet rigorous compliance standards. Since its founding in 2024, Adclear has focused on addressing the growing complexities of FCA compliance. In 2023, the FCA’s introduction of stricter Consumer Duty regulations and AI-enhanced monitoring significantly increased scrutiny on high-risk investments, amplifying the need for streamlined compliance solutions. Adclear’s success has positioned it as a leader in RegTech innovation. The company plans to expand its team, enhance its AI capabilities, and extend its compliance coverage to EU and US regulatory frameworks. Plum tapped AdClear for marketing compliance Last year, Plum partnered with AdClear.ai to ensure their its communications are clear, accurate, and compliant with relevant regulations. AdClear.ai will help the investment platform to enhance consumer protection by ensuring clear, accurate communications and minimizing risk in marketing and promotional materials. Plum, known for its innovative financial solutions, serves a rapidly growing customer base. By leveraging adclear.ai’s robust marketing compliance solution, the app is well-supported in creating easily comprehensible, precise communications that empower customers to achieve the best outcomes. The investing platform offers features like automatic savings, budgeting tools, and investment options. Plum analyzes users’ spending patterns and automatically sets aside small amounts of money into savings, helping them save without thinking about it. In addition to savings, Plum also provides tools for managing bills, tracking expenses, and investing in a range of funds, making it a comprehensive financial management platform. Plum is particularly popular among younger users who seek a simple and automated approach to managing their finances. UK Consumer Duty requires products to deliver good outcomes for consumers AdClear.ai plays a significant role in helping businesses comply with the UK’s Consumer Duty regulations, which mandate that firms ensure their products and services deliver good outcomes for customers. The Consumer Duty requires that companies not only provide clear, fair, and non-misleading communications but also take proactive steps to avoid causing foreseeable harm to consumers. AdClear.ai’s marketing compliance tools are valuable in this context as they assist firms in reviewing and refining their marketing materials to meet these stringent standards. By using AdClear.ai, companies can ensure that their promotions are not only compliant but also transparent and customer-focused, which aligns with the principles of the Consumer Duty. This helps firms mitigate risks associated with non-compliance, such as fines or reputational damage, while also promoting trust and transparency with consumers​.

Acuity Trading has announced a strategic partnership with cTrader, bringing its suite of advanced analytics tools directly to one of the industry’s leading trading platforms. This collaboration aims to transform trading experiences by integrating cutting-edge data and insights into brokers’ and traders’ workflows. “Power of cTrader as an Open Trading Platform” Andrew Lane, CEO of Acuity Trading, said: “This integration exemplifies Acuity Trading’s commitment to empowering brokers and traders with intuitive, data-driven tools that are seamlessly integrated into their preferred platforms. By embedding our suite of advanced insights into cTrader, we are delivering unparalleled functionality to elevate trading outcomes.” Ilia Iarovitcyn, CEO of cTrader, said: “Our partnership with Acuity highlights the true power of cTrader as an Open Trading Platform. This collaboration demonstrates the platform’s ability to incorporate third-party services, offering partners instant access to essential market insights. We are committed to providing brokers with the tools they need to optimize user experience and achieve success in today’s fast-paced market.” The partnership enables cTrader users to access Acuity Trading’s tools, including: Research Terminal and NewsIQ: AI-powered research tools that consolidate market insights, news, economic calendars, and signals into one interface. AnalysisIQ: Trade ideas with detailed analysis to support informed decisions. AssetIQ: Deep-dive analysis of assets, leveraging forensic AI technology across diverse data sources. Economic and Corporate Calendars: Tools that monitor global economic events and corporate actions with precision. These features are embedded directly into the cTrader platform, ensuring a seamless user experience. Brokers can also customize the tools for specific client needs, such as server-based access control and content display based on account thresholds. The partnership with cTrader is part of Acuity Trading’s broader efforts to revolutionize trading technology. In 2024, Acuity launched its advanced AI-powered sentiment tools, receiving accolades for improving decision-making in volatile markets. cTrader, recognized as an industry leader in trading platform technology, has also been expanding its functionality with the addition of free cloud execution for cBots and enhanced API tools for developers. The collaboration builds on both companies’ strengths, marking a significant milestone in their shared mission to empower brokers and traders with innovative, data-driven solutions.

Rostro Group has appointed Saul Knapp as Managing Director of Futures and Options, where he will spearhead the firm’s entry into futures and options trading while continuing to serve as Chief Risk Officer. The establishment of Rostro’s Futures and Options division reflects its strategic commitment to diversifying its product offerings in response to growing client demand. CME, ICE, Eurex futures and options via TT and CQG Direct Market Access (DMA) for futures and options will be provided through partnerships with order management system providers TT and CQG. The two leading OMS providers will allow traders to access thousands of futures and options contracts listed in major exchange operators, including CME Group, ICE, and Eurex. Since its founding in 2021, Rostro Group has established itself as a prominent fintech group with operations across six global jurisdictions. The firm provides multi-regulated brokerage services, specializing in listed securities and OTC derivatives. In recent years, Rostro has launched several initiatives to enhance its Prime Brokerage services, offering tailored execution and clearing solutions to institutional clients. The addition of the Futures and Options division is the latest milestone in the company’s ambitious growth strategy, further diversifying its service offerings for institutional investors. With Saul Knapp at the helm of this new division, Rostro Group is well-positioned to deliver innovative solutions to its clients, strengthening its reputation as a forward-thinking leader in the financial services industry. “We will be facilitating trade for smaller banks, brokers, and other institutional investors” Saul Knapp, Managing Director of Futures and Options and Chief Risk Officer at Rostro, said: “Our expansion into futures and options comes at a time when we’re seeing significant levels of innovation across the sector. “The exchanges themselves, as well as those involved in the clearing and settlement processes, are working to make their products even more accessible, and we are now ready to leverage the opportunity this holds. We will be facilitating trade for smaller banks, brokers, and other institutional investors who can benefit from our high levels of customer service, strong balance sheet, and in-depth knowledge of the products.” Knapp began his financial career in the 1990s as an independent derivatives trader on the London International Financial Futures Exchange (LIFFE) floor. He later held risk and trading roles at leading brokerages and trading firms in London, amassing decades of experience in the financial markets.

This article was written by Paul Reid, a financial journalist at Exness. As of January 22, 2025, the buzz around President Donald Trump’s new AI initiative–named Stargate has captured–the attention of both tech enthusiasts and investors alike. Within hours of the announcement, the NASDAQ (USTEC), began a bullrun, and positive sentiment is building. So what’s it all about and how will Stargate shape the tech sector in the coming weeks and months. What to expect from project Stargate? The estimated $500 billion (USD) initiative promises to reshape the landscape of artificial intelligence in the US, aiming to enhance innovation and economic growth. But what exactly does Stargate entail, and how could it impact various sectors, including trading? Stargate is designed to leverage advanced artificial intelligence technologies to improve government efficiency, enhance national security, and drive economic competitiveness. The initiative focuses on fostering collaboration between private sector innovators and government agencies to accelerate the development and deployment of AI solutions across various industries. Three major CEOs are involved in the Stargate project so far, which begs the question, how will their company’s stocks react to announced support from the White House. Is it safe to assume these companies will have certain advantages? Will those advantages enhance growth, and will investors see it as a bullish signal? Here are the three CEOs that Trump introduced when revealing the initiative. Sam Altman – As the CEO of OpenAI, Sam Altman has been at the forefront of AI innovation. His presence at the Stargate initiative underscores the importance of collaboration between government and leading tech firms to harness AI’s potential for societal benefit. Satya Nadella – The CEO of Microsoft, Satya Nadella, is also a key figure in this initiative. Microsoft has been heavily investing in AI technologies and cloud computing, positioning itself as a leader in providing AI solutions that can enhance government operations and services. IBM’s CEO – The third CEO present was from IBM, a company renowned for its contributions to artificial intelligence through its Watson platform. IBM’s involvement signifies a commitment to advancing AI applications across various sectors, including healthcare and data analytics. Implications for technology and the economy The introduction of Stargate signifies a significant shift in how the US approaches AI development. Clearly, Trump and his advisors see AI as the future of global power, and they appear to be going “all in.” By prioritizing collaboration between public and private sectors, this initiative aims to create a robust ecosystem that encourages innovation while addressing regulatory challenges. This could lead to breakthroughs in fields such as healthcare, transportation, and cybersecurity. From an economic perspective, Stargate could stimulate job creation in tech-related fields as companies ramp up their AI capabilities. Such shifts typically boost the US economy, strengthen USD, and fuel further rallies for indices that will benefit from an AI hype. The demand for skilled workers in data science, machine learning, and AI ethics is expected to rise significantly. As businesses adapt to these changes, we could see a ripple effect across various sectors, impacting everything from consumer spending to investment strategies. Market reactions and trading opportunities As traders, it’s wise to consider how initiatives like Stargate might influence market dynamics. Stocks in technology sectors, particularly those focused on AI development such as NVIDIA, Alphabet, and Microsoft, may see increased volatility as investors react to news surrounding the initiative. If Stargate leads to significant advancements or contracts awarded to these companies, their stock prices could rise sharply. Moreover, sectors that rely heavily on technological advancements—such as healthcare and finance—may also benefit from this initiative. For instance, companies developing AI-driven healthcare solutions could experience increased funding and support from government contracts. In terms of forex trading, the US dollar (USD) may be influenced by market sentiment surrounding economic growth prospects tied to the Stargate initiative. If investors perceive that this initiative will lead to robust economic performance, we might see dollar strength in currency pairs like EURUSD or GBPUSD. Conclusion As we delve into the implications of President Trump’s Stargate AI initiative, it’s clear that this program has the potential to reshape the technological landscape in the US. By fostering collaboration between government and private sectors, Stargate aims to drive innovation while enhancing economic growth. Stay informed about developments related to Stargate and consider how they might influence your trading strategies with Exness. With competitive spreads and advanced trading tools at your disposal, you can position yourself effectively in response to these exciting changes in the market.   The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.  The information on this page does not constitute advice or a recommendation on any course of action and does not take into account your personal circumstances, financial situation, or individual needs. We strongly recommend you seek independent professional advice or conduct your own independent research before acting upon any information contained herein.

Hong Kong’s Legislative Council has begun detailed discussions on a proposed stablecoin regulation bill, as the government moves quickly to establish a regulated cryptocurrency environment. The bill had its first reading in December and now reached committee review. Francis Ho, deputy secretary for Financial Services and the Treasury, explained during the Tuesday meeting that stablecoin issuers would be required to obtain a license from the Hong Kong Monetary Authority (HKMA). The legislation also proposes stringent measures to ensure stablecoins are backed by high-quality, liquid reserve assets and a robust reserve stabilization mechanism. The HKMA will scrutinize the issuer’s management, resources, the stablecoins themselves, their reserve assets, and the mechanisms ensuring price stability. Secondly, only regulated entities and platforms will be permitted to offer or market stablecoins within Hong Kong. Thirdly, the bill incorporates consumer protection measures that will affect all market participants, including both issuers and distributors. The implementation of this bill could alter Hong Kong’s stablecoin market, mirroring the impact of Europe’s Markets in Crypto-Assets (MiCA) regulations. Hong Kong’s government is stepping up efforts to attract crypto investors, announcing plans to expand existing tax breaks for privately offered funds and family offices to include crypto investments. Hong Kong has been actively positioning itself as a hub for crypto firms. In June 2023, the government launched a licensing system for crypto trading platforms, allowing regulated exchanges to offer retail trading services. Three firms—OSL Exchange, HashKey Exchange, and HKVAX—have already secured licenses, and the government expects more to follow soon. The Securities and Futures Commission is assessing additional applications as it expects a wave of new licensed exchanges in the coming months. Currently, a total of 16 companies are awaiting decisions on their VATP applications, with 11 already operating as “deemed to be licensed,” despite the SFC advising caution against trading with them. The SFC has completed its first round of on-site reviews of these crypto firms. SFC CEO Julia Leung confirmed that all VATPs adhering to the commission’s licensing model could expect their applications to be approved. Leung stated that the regulator expects to make progress in granting licenses to 11 Virtual Asset Trading Platforms (VATPs) currently on its list of potential licensees. He also mentioned that licenses would be issued in batches to improve compliance among crypto exchanges. In a separate Legislative Council session, another subcommittee focused on cryptocurrency development reviewed the licensing framework for crypto trading platforms. Joseph Chan, undersecretary for the FSTB, said that a new consultation panel will be formed to gather industry input, with plans to regulate over-the-counter crypto trading and develop licensing regulations for crypto custodians. The government intends to release the draft regulations for public consultation later this year.