Mixin Network Suspends Services Amid $200 Million Hack

The Hong Kong Virtual Asset Consortium (HKVAC), a digital asset group in China's special administrative region, has announced modifications to its core cryptocurrency index, reshuffling the top contenders to the detriment of XRP, the payment solution token developed by Ripple Labs.Photo by Kanchanara on UnsplashSolana takes top 5 slotEffective as of this Friday, HKVAC will replace XRP with Solana (SOL) in its Top 5 Large Cryptocurrency Index, signaling a shift in the composition of its benchmark index. HKVAC is a collaborative effort between Hong Kong-based industry participants such as crypto exchanges and licensed ratings agencies. Its aim is to optimize the risk management capabilities of the crypto sector and in that way, assisting market participants including local regulatory bodies. Crypto exchange platform HTX, previously known as Huobi, became the first member of HKVAC in 2023. It was joined by iPollo, KuCoin, LK Venture, Nano Labs, Purise, Wealthking Investment, G-Rocket Global Accelerator, Hong Kong Data Infinity Technology and others in making up the organization’s membership. The HKVAC's Top 5 index reflects the global cryptocurrency ranking based on market capitalization, maintaining a pulse on the ever-evolving crypto landscape. However, beyond market cap, the digital asset group considers additional factors such as market valuation, investability and liquidity in its index rebalancing decisions. Solana’s growth and progressionSolana, currently ranked as the fifth-largest cryptocurrency, has been making substantial strides in the market. Despite the 2022 collapse of the FTX crypto exchange, which significantly impacted SOL's price, the cryptocurrency has made an impressive recovery. Over the past year Solana has surged by 315%. Presently, SOL boasts a market cap of $41 billion, securing its position in the top echelons of the cryptocurrency market. In contrast, XRP, the ousted cryptocurrency, has experienced a more modest price growth during the same period. As of the latest data, XRP holds the sixth position in the cryptocurrency ranking, with a valuation of $31 billion. The decision to remove XRP from the Top 5 index was met with a 3.9% decline in its value, settling at $0.57. XRP had moved within the Top 5 index in October of last year. It was added to the index alongside SHIB in 2023. At the time of its formation, HKVAC emphasized that market capitalization was one of the primary criteria incorporated within the evaluation, which extends to 30 cryptocurrencies. A re-evaluation is carried out each quarter on the basis of that market cap criterion. Crypto rating reshuffleThe HKVAC's reshuffling extends beyond the Top 5 index, impacting other leading cryptocurrencies. Notable changes include the removal of Filecoin (FIL), Binance USD (BUSD), Maker (MKR), Hedera (HBAR) and TrueUSD (TUSD) from the Global Large Cryptocurrency Index. These have been replaced by Near Protocol (NEAR), Internet Computer (ICP), Immutable (IMX), Optimism (OP) and Injective (INJ). Additionally, Avalanche (AVAX) is set to replace Tron (TRX) on the HKVAC Top 10 Global Large Cryptocurrency Index, effective this Friday. These adjustments come amid Hong Kong's ongoing efforts to bolster the cryptocurrency industry within the region. In December, the financial regulator in Hong Kong signaled its readiness to accept spot crypto exchange-traded funds (ETFs). This move aligns with the United States Securities and Exchange Commission's review of 11 spot bitcoin ETF applications, ultimately approved on Jan. 10.   

HashKey on-boards market makers to boost liquidityHashKey, a licensed crypto exchange in Hong Kong, has unveiled plans to onboard individual and enterprise market makers to enhance liquidity on its platform.Photo by engin akyurt on UnsplashMarket maker programIn an announcement on Tuesday, the exchange disclosed that interested parties, whether individuals or entities, can apply to become market makers on HashKey. To qualify, applicants need to engage in cryptocurrency trading worth a minimum of $5 million per month on the exchange.The exchange outlined that the program aimed to “recognize and incentivize users actively contributing to the liquidity” of the platform.Upon submitting their business plans for review, successful applicants will be invited to enter into a contractual agreement with the exchange’s due diligence team, commencing trading activities from Dec. 28 onwards when the program goes live.Commission free tradingThe exchange aims to encourage liquidity providers by offering a commission ranging between 0.005% and 0.015% of the transaction value, determined by monthly rankings or trading volumes, falling within a tiered structure set out within the program. Market makers demonstrating a trading volume of at least $100 million per month stand to enjoy the highest tier of commission revenue. Notably, all market makers will be exempt from commission fees on their trades.Market makers who participate via the program will be on trial for an initial two-month period. Those who are participating in market maker programs on other platforms currently will be able to avail of equivalent trial fee rates through the HashKey exchange.Service expansion trendThe move by HashKey follows a broader trend in Hong Kong, where regulated exchanges have been expanding their services and forming strategic partnerships since the issuance of the first licenses in August. In a recent development, OSL, another Hong Kong licensed exchange, collaborated with Interactive Brokers on November 28, enabling Hong Kong clients to buy Bitcoin through Interactive Brokers’ investment accounts.Additionally, on November 30, OSL welcomed Victory Securities for crypto trading services on its platform. That move came about following Victory’s acquisition of a retail crypto trading license some days beforehand. Notably, OSL received a $90 million investment from blockchain entity BGX in November.While HashKey has been extending its altcoin offerings, exclusively available to accredited investors meeting a $1 million portfolio requirement, the exchange has been proactive in enhancing user security. On Nov. 16, the platform introduced comprehensive insurance coverage for users’ and enterprise assets stored within its digital wallets in collaboration with fintech firm OneDegree.Earlier this week, it emerged that the platform had experienced an unprecedented surge in daily trading volumes. The surge had been attributed to a token rewards program that the exchange is currently running, that offers the distribution of HSK tokens or EcoPoints.As HashKey opens its doors to market makers, the move is poised to contribute to increased liquidity on the exchange, aligning with the broader trend of Hong Kong’s regulated crypto exchanges expanding their offerings and forming strategic partnerships.

Taiwan Advances Crypto Regulation with Initial Reading of Digital Asset BillTaiwan has furthered its efforts on the path of digital asset regulation, as the nation’s legislature introduced a cryptocurrency bill for its inaugural reading.The “Virtual Asset Management Ordinance Draft” bill represents a significant stride toward establishing a legal framework for digital assets in the country. The proposal passed its first reading at the Taiwanese state legislature, according to published parliamentary records.Photo by Ethan Lin on UnsplashBill objectivesThe primary objectives of the bill are to define virtual assets, establish operational standards for asset operators, enhance customer protection, and make it mandatory for industry players to join relevant associations and secure regulatory permissions.Up until now, Taiwan has maintained a relatively hands-off approach to the cryptocurrency sector. Its oversight was limited to existing know-your-customer (KYC) and anti-money laundering (AML) laws. However, this stance evolved following the collapse of the cryptocurrency exchange FTX in November. The platform’s popularity among Taiwanese users, owing to favorable US dollar interest rates compared to local banks, led to increased regulatory scrutiny.A member of Taiwan’s parliament, Yung-Chang Chiang, told The Block that “after the first reading of the bill, discussions on the regulatory framework for the virtual asset industry have progressed to the next stage.” Chiang added:“We hope that the Financial Supervisory Commission can also submit their version of a draft bill to the legislature, allowing various sectors of society to further consolidate consensus during the process.”In contrast to cryptocurrency regulations in neighboring Hong Kong, Taiwan’s bill does not adopt a strong stance on derivatives or stablecoins. Nevertheless, it recognizes that derivatives linked to virtual assets possess unique characteristics, with a specific mention of perpetual contracts. This recognition opens the door for the possibility of cryptocurrency derivative-specific regulation in future drafts.Importantly, the bill does not restrict the trading of virtual assets to professional investors, which allows broader participation in the digital asset market.Auditing and segregation of fundsUnlike Japan, which mandates the use of custodians for locally licensed exchanges, the draft bill in Taiwan only necessitates the segregation of customer assets from business funds. It does not explicitly require the involvement of third-party custodians.Under this legislation, exchange operators will be obliged to commission periodic reports from accountants regarding their operations and asset management. Additionally, regulators, such as the Financial Supervisory Commission (FSC), will have the authority to conduct regular inspections of exchange internal control and audit systems.Although this initial draft does not explicitly mention “Proof of Reserves,” it does indicate that the regulator will establish standards for asset ratios after consulting with industry stakeholders, with the expectation that licensed exchanges will adhere to these standards.Fostering self regulationTaiwan’s crypto industry stakeholders have expressed their support for formal regulatory oversight. Wayne Huang, co-founder and CEO of Taipei-based fintech company XREX, recently affirmed the industry’s willingness to collaborate with the FSC in defining regulatory operations.In tandem with the establishment of a regulatory framework, regulators have indicated that they want industry stakeholders to move towards some level of self-regulation. That led nine exchange businesses to form an industry association last month.The bill’s second reading is pending, and the FSC is anticipated to provide its input and recommendations before the next phase of the legislative process.