Hong Kong’s strict banking requirements may hinder its potential as a crypto hub.

Good morning. Here’s what’s happening:

Prices: Bitcoin initially rose sharply but then stabilized. Other cryptocurrencies recovered some of the losses from Wednesday.

Insights: Hong Kong’s banks may not yet be prepared to help turn the city into a cryptocurrency hub.

Prices

#amp-table { content-visibility: hidden; } #widget-container-responsive { padding:3px; font-family:’Helvetica Neue’, Verdana, sans-serif; font-size:13px; min-width:220px; margin-top:15px; display: flex; flex-direction: column; background-color: #fff; content-visibility: visible !important; } #content-responsive { border-radius: 5px 5px 0 0; margin: 0px; box-sizing: border-box; display: grid; } .content-cell { min-width:220px; padding:10px; float:left; } .content-cell-title { padding-bottom: 5px; color: #333; text-align: left; padding-bottom: 5px; } a.content-cell-link { color: #333; text-decoration: none; } .content-cell-value { color: #333; font-size: 18px; line-height: 42px; float:left; } .content-cell-value-row { font-weight: 700; display: block; } .diff-value { font-size: 12px; margin-right: 5px; color: #a3a3a3; line-height: 23px; } .return-success-dark { color: #00D964; } .return-success-light { color: rgb(25,135,84); } .return-danger-dark { color: #FF0000; } .return-danger-light { color: rgb(220,53,69); } .content-variation-container { text-align: right; padding-top: 12px; } .content-cell-value-variation { font-weight: 700; font-size: 16px; line-height”: 42px; } #disclaimer-responsive { font-size: 11px; min-width:300px; width:100%; margin:0 auto; text-align:center; } @media (min-width: 1024px){ #content-responsive { grid-template-columns: 1fr 1fr 1fr; } .content-cell-pos-0 { border-right: 1px solid lightgray; border-bottom: 1px solid lightgray; grid-column: 1 / span 1; grid-row: 1; } .content-cell-pos-1 { border-right: 1px solid lightgray; border-bottom: 1px solid lightgray; grid-column: 2 / span 1; grid-row: 1; } .content-cell-pos-2 { border-right: none; border-bottom: 1px solid lightgray; grid-column: 3 / span 1; grid-row: 1; } .content-cell-pos-3 { border-right: 1px solid lightgray; border-bottom: none; grid-column: 1 / span 1; grid-row: 2; } .content-cell-pos-4 { border-right: 1px solid lightgray; border-bottom: none; grid-column: 2 / span 1; grid-row: 2; } .content-cell-pos-5 { border-right: none; border-bottom: none; grid-column: 3 / span 1; grid-row: 2; } } @media (min-width: 600px) and (max-width: 1023px) { #content-responsive { grid-template-columns: 1fr 1fr; } .content-cell-pos-0 { border-right: 1px solid lightgray; border-bottom: 1px solid lightgray; grid-column: 1 / span 1; grid-row: 1; } .content-cell-pos-1 { border-right: none; border-bottom: 1px solid lightgray; grid-column: 2 / span 1; grid-row: 1; } .content-cell-pos-2 { border-right: 1px solid lightgray; border-bottom: 1px solid lightgray; grid-column: 1 / span 1; grid-row: 2; } .content-cell-pos-3 { border-right: none; border-bottom: 1px solid lightgray; grid-column: 2 / span 1; grid-row: 2; } .content-cell-pos-4 { border-right: 1px solid lightgray; border-bottom: none; grid-column: 1 / span 1; grid-row: 3; } .content-cell-pos-5 { border-right: none; border-bottom: none; grid-column: 2 / span 1; grid-row: 3; } } @media (max-width: 600px) { #content-responsive { grid-template-columns: 1fr; } .content-cell { border-right: none; border-bottom: 1px solid lightgray; } .content-cell-pos-0 { grid-row: 1; grid-column: 1; } .content-cell-pos-1 { grid-row: 2; grid-column: 1; } .content-cell-pos-2 { grid-row: 3; grid-column: 1; } .content-cell-pos-3 { grid-row: 4; grid-column: 1; } .content-cell-pos-4 { grid-row: 5; grid-column: 1; } .content-cell-pos-5 { border-bottom: none; grid-row: 6; grid-column: 1; } } blockchain Market Index (CMI) 1,079 +13.0 ▲ 1.2% Bitcoin (BTC) $25,572 +467.2 ▲ 1.9% Ethereum (ETH) $1,665 +15.3 ▲ 0.9% S&P 500 4,425.84 +53.3 ▲ 1.2% Gold $1,971 +15.3 ▲ 0.8% Nikkei 225 33,485.49 −16.9 ▼ 0.1% BTC/ETH prices per blockchain Indices , as of 7 a.m. ET (11 a.m. UTC)

Blockchain Market Index (CMI)
1,079 +13.0 ▲ 1.2%
Bitcoin (BTC)
$25,572 +467.2 ▲ 1.9%
Ethereum (ETH)
$1,665 +15.3 ▲ 0.9%
S&P 500
4,425.84 +53.3 ▲ 1.2%
Gold
$1,971 +15.3 ▲ 0.8%
Nikkei 225
33,485.49 −16.9 ▼ 0.1%
BTC/ETH prices per blockchain Indices , as of 7 a.m. ET (11 a.m. UTC)

Bitcoin Spurts, Then Fizzles

Bitcoin and other crypto assets briefly rose late Thursday after fund management giant BlackRock iShares filed paperwork for the formation of a spot bitcoin ETF with the U.S. Securities and Exchange Commission (SEC). However, the rally fell short of BTC’s previous high at nearly $26,000, and the largest cryptocurrency was recently trading at $25,556, up nearly 2% over the past 24 hours. Bitcoin fell late Wednesday amid concerns about U.S. central bank monetary policy and increasing regulatory scrutiny over cryptocurrencies.

Ether also saw a spike, trading above $1,660, a 0.8% gain from Wednesday. Other major cryptocurrencies turned green with SOL, the token of the Solana smart contracts platform Solana, recently up 1.8%, and SAND and AXS also rising more than a percentage point. However, MATIC, the native cryptocurrency of the Polygon blockchain, was down more than 4%. These assets were among 19 mentioned in lawsuits filed by the SEC against exchanges Binance and Coinbase for allegedly violating securities laws.

In an email to blockchain, Brian D. Evans, the CEO of Web3 venture studio and advisory firm BDE Ventures, noted investor concerns about the increasingly unfavorable U.S. regulatory climate for cryptocurrencies. Evans wrote that projects are seeking better-regulated jurisdictions outside of the United States, such as Hong Kong, Dubai, and the U.K. A global reshuffling is taking place, shaping the next burst of innovation and market exuberance in Asia and the Middle East. In short, the bullishness is there, but it’s increasingly being driven by events happening abroad.

Read More: BlackRock’s iShares Files Paperwork for Spot Bitcoin ETF

Read More: SEC’s Binance, Coinbase Suits Create Uncertain Future for Listed Tokens: Legal Experts

Biggest Gainers

Asset Ticker Returns DACS Sector
Gala GALA +4.5% Entertainment
Shiba Inu SHIB +2.6% Currency
Cosmos ATOM +1.9% Smart Contract Platform

Biggest Losers

Asset Ticker Returns DACS Sector
Polygon MATIC −5.3% Smart Contract Platform
Polkadot DOT −4.6% Smart Contract Platform
Stellar XLM −3.9% Smart Contract Platform

Insights

Hong Kong as Crypto Hub? The Banks May Not Be Ready

Take their money!

That’s the message that Hong Kong’s financial regulator is telling some of the City’s banks who refuse to onboard crypto clients.

“The HKMA has consistently communicated the importance of banks following the risk-based approach to managing the risks of individual customers,” a Hong Kong Monetary Authority spokesperson told blockchain earlier.

It’s not the first time we’ve heard of crypto companies having trouble banking in Hong Kong.

A few months ago, news broke that the Hong Kong branches (which are largely autonomous and operate by local rules) of some of China’s state-owned banks were soliciting crypto business in the City.

There was just one problem. While they might talk a big game about being ready to embrace crypto – unthinkable years ago – potential clients found it nearly impossible to get on-board.

“The city’s digital assets regulation is overall friendly and encourages banks to work with crypto companies, however, banks still currently have stringent requirements in place, which makes it difficult for crypto businesses to expand and grow,” Adrian Wang, founder, and CEO of Metalpha, a Hong Kong-based digital assets wealth management company, said to blockchain at the time. “We have yet to see major progress in the banking sector to embrace crypto. Hopefully, that will change soon.”

At one time, Hong Kong had the unfortunate reputation of being a money laundering center for organized crime. HSBC paid out record fines for their behavior. It’s a much more conservative, risk-managing organization as a result. Billions in penalties will do that to a company.

Almost understandably, banks don’t want to get involved with crypto. The Securities and Exchange Commission (SEC) and CFTC, which seem to have given themselves a supranational mandate, have accused Binance of co-mingling $12 billion in funds and violating securities laws. The same goes for Coinbase.

Banks would really not want these as a client.

Binance and Coinbase are the big fish and were attacked first, but who knows what exchange could be next. Even if a bank in Hong Kong doesn’t do business in the U.S., it can still be caught up in the regulatory dragnet – if U.S. authorities go after an exchange that’s otherwise legal in Hong Kong – by virtue of it offering USD products.

Despite the need for optimism, Hong Kong seems to have a long way to go before becoming a cryptocurrency hub.

Important events.

5:00 p.m. HKT/SGT(9:00 UTC) Eurozone Harmonized Index of Consumer Prices (YoY/May)

7:45 p.m. HKT/SGT(11:45 UTC) United State Fed’s Waller Speech

10:00 p.m. HKT/SGT(14:00 UTC) Michigan Consumer Sentiment Index (June)

blockchain TV

If you missed it, here is the latest episode of “First Mover” on blockchain TV :

Bitcoin Drops Below $25K; Bankrupt Crypto Exchange Bittrex U.S. Set to Allow Withdrawals

Cryptocurrencies fell sharply, with bitcoin (BTC) dropping below $25,000 after the Federal Reserve policy decision to suspend rate hikes for at least one meeting. Path Trading Partners Chief Market Strategist Bob Iaccino broke down the market reaction. Plus, Ripple Chief Legal Officer Stuart Alderoty on strategy after the release of documents tied to William Hinman. And, the U.S. arm of Bittrex was set to open for customer withdrawals Thursday following a ruling by a Delaware bankruptcy court. Bittrex Chief Legal Officer David Maria discussed the news.

Headlines

Polygon Labs Rolls Out Open Database for Blockchain Use Cases : Called “The Value Prop,” the database hosts as many as 39 use cases and over 300 applications, with numbers expected to increase.

Colombia’s Central Bank Partners with Ripple to Explore Blockchain Use Cases : The Latin American country will conduct a pilot to test Ripple’s technology for its high-value payments system.

Crypto Exchange Bybit Integrates ChatGPT Into Trading Tools : Traders will be able to analyze market data with the new AI-based feature called “ToolsGPT.”

USDT Selling on Curve, Uniswap Spooks Traders Amid Bitcoin Drop : USDT holdings on Curve’s popular ‘3pool’ have risen to over 72% as of Thursday morning, suggesting a sudden disbalance.

Hong Kong Put Pressure on 3 Major Banks to Take On Crypto Exchanges as Clients, Report : According to the Financial Times, the Hong Kong Monetary Authority put pressure on HSBC, Standard Chartered and Bank of China.

Edited by James Rubin.