KuCoin invests in cross-chain inscription protocol

Victory Securities granted approval for retail crypto trading in Hong KongHong Kong’s Securities and Futures Commission (SFC) has given the green light to Victory Securities, a well established investment firm headquartered in the Chinese autonomous territory, for retail virtual asset trading.Photo by Carlos Alberto Gómez Iñiguez on UnsplashFirst licensed corporationThe license will allow the investment firm to expand its crypto trading and advisory services to retail investors. The publicly traded company announced its crypto licensing achievement via a press release published to its website on Friday. In that statement, the company expressed the hope that “by connecting traditional finance with virtual assets, customers can configure assets in a flexible and convenient way, and [we] can provide general investors with investment advice on virtual assets and publish relevant research reports.”This approval marks Victory Securities as the first licensed corporation in Hong Kong to offer such services to the retail market, joining the ranks of already approved firms like HashKey Exchange and OSL Digital Securities. It builds upon previous licensing approval that the company received from the SFC to offer a full range of trading and advisory services in respect of virtual assets to institutional clients in November 2022.The move reflects Hong Kong’s commitment to crypto regulation, as earlier this year, the region established a framework enabling the provision of crypto services to retail clients. This development positions Hong Kong as a key player in the Asian crypto market, where firms seem to be receiving more regulatory clarity compared to their counterparts in the United States. The regulatory initiative gains significance in light of the recent JPEX scandal, involving an alleged HK$1.6 billion ($204 million) fraud.Bringing retail into cryptoVictory Securities, currently listed as an applicant on the SFC’s recently published roster of virtual asset trading firms, is navigating this regulatory landscape to bring retail investors into the crypto market. In parallel, HashKey Group, another Hong Kong-based cryptocurrency firm, has launched the city’s first SFC-approved trading app since the JPEX incident. HashKey Exchange’s app, boasting “full mobile trading capabilities,” became operational this month, a notable progression given its prior limitation to professional investors.Through HashKey’s app, local traders can now engage in bitcoin and ether transactions using funds from their Hong Kong or U.S. dollar bank accounts. In addition to pioneering retail crypto trading, HashKey has introduced its crypto over-the-counter (OTC) trading service, HashKey Brokerage, aligning with local securities regulations and the recently implemented cryptocurrency regulatory framework by the SFC.The Hong Kong regulator is also believed to be currently weighing up whether to allow retail investors the ability to access spot crypto exchange-traded funds (ETFs). Despite these advancements, the SFC maintains restrictions on retail traders engaging in stablecoin transactions until new regulatory arrangements are established. This decision follows the SFC’s consultation paper on regulating crypto activities, emphasizing the need to address risks associated with stablecoins and their regulation.The regulator aims to ensure appropriate management of stablecoin reserves to maintain price stability and safeguard investors’ redemption rights, underscoring the potential significant implications for stablecoin stability if these risks are not effectively managed.As Hong Kong solidifies its position in the evolving crypto landscape, Victory Securities’ approval signifies yet another milestone in the region’s journey toward fostering a regulated and inclusive crypto market for retail investors.

The UK affiliate of Banxa, the Australia-headquartered financial infrastructure firm, has clinched a coveted spot as the first entity to grace the Financial Conduct Authority's (FCA) crypto register for the year 2024.Photo by Susan Q Yin on UnsplashAuthorized VASPThe company drew attention to this milestone on Tuesday, through the publication of a press release. The approval catapults BNXA UK VASP (virtual asset service provider) into the realm of authorized providers of crypto-related services to clients residing in the United Kingdom. Notably, the UK subsidiary company's managing director, Brinda Paul, formerly held the director of compliance position at Banxa in Melbourne. She struck an optimistic note in her comments on the approval, stating:"I am incredibly proud to have led this registration process to a successful outcome, especially considering the low approval rate of 7% for FCA registrations in 2023, - only 4 companies received their registration. Banxa believes the FCA's high standards, focusing on robust business models, corporate governance, risk management and compliance validates the Company's commitment to support cryptoasset adoption and the development of the crypto market in the UK while doing so in a compliant manner." Banxa's stature extends to its listing on the Toronto Stock Exchange, solidifying its position as a key player in the payments infrastructure domain. The company claims to be following a mission to “build the infrastructure to extend the benefits of crypto to every merchant & consumer in the world.” The firm includes Asian crypto service provider and investor OK Group among its list of initial investors. Other early stage investors include KuCoin and Australia’s Thorney Investment Group. Fiat processing servicesThe company specializes in fiat-processing services tailored for various cryptocurrency exchanges, including heavyweights like Binance and OKX. It’s interesting to note that in the case of these two companies, neither Binance nor OKX holds FCA approval for their crypto operations, although OKX has been making a concerted effort of late towards coming into compliance. Banxa has been accumulating money transmitter licenses in the United States. As of September, the company held 32 such licenses for various U.S. states. A pivotal aspect of FCA registration pertains to promotional endeavors targeting UK customers. Entities aiming to disseminate promotional materials to UK-based clients must either secure registration with the FCA or obtain approval for their promotions through an authorized entity. Responding to legislative changes, the FCA has rolled out updated guidance, extending its oversight to crypto promotions targeting UK consumers. This move aims to enhance consumer comprehension of crypto investments and associated risks, in line with the FCA's commitment to consumer protection and market integrity. New UK marketing rulesNew marketing rules have led to exchanges like Bybit withdrawing services from the UK market. Recent developments have also seen crypto platforms like KuCoin and HTX added to the FCA’s warning list of unregulated entities. Drawing insights from industry consultations, the FCA has refined its rules and accompanying guidance, integrating feedback from stakeholders to ensure coherence and effectiveness in navigating the evolving regulatory terrain. 

A Hong Kong-based entity has emerged as the largest new shareholder of BlackRock’s spot Bitcoin exchange-traded fund (ETF), according to a recent regulatory filing.Photo by Kanchanara on UnsplashAs of Dec. 31, the firm held roughly 8.79 million shares of the iShares Bitcoin Trust ETF (IBIT), valued at $436 million, per a Form 13F disclosure filed with the U.S. Securities and Exchange Commission (SEC). The filing identifies the shareholder as "Laurore" and the reporting individual as Zhang Hui. While the entity is listed as Hong Kong–based, the document provides no further details regarding the company’s background or sources of capital. Because Form 13F filings disclose institutional equity holdings only at the end of each quarter, the specific timing of Laurore's accumulation of the IBIT stake remains unclear. Workaround for Chinese Bitcoin restrictionsJeff Park, Chief Investment Officer at ProCap Financial, noted on X that the entity appears to lack a public footprint. He observed that the filer’s name is common in China, suggesting limited traceability, and added that the “Ltd.” designation may indicate an offshore structure often utilized to access U.S. markets. Park further suggested that because IBIT is the firm's sole disclosed holding, Laurore likely functions purely as a $436 million Bitcoin exposure vehicle rather than a diversified fund. He theorized that this structure might reflect Chinese capital seeking regulated Bitcoin exposure via a U.S.-listed ETF, potentially signaling early indications of institutional capital flight. This disclosure arrives amidst a prolonged downturn for Bitcoin. The cryptocurrency is currently trading near $67,000, representing a decline of about 47% from its Oct. 7 peak of $126,000. Analysts split as BTC trades 47% below peakMarket analysts have offered diverging outlooks on Bitcoin’s next move. According to CoinDesk, Bloomberg Intelligence analyst Mike McGlone stated on X that he has raised his downside target for Bitcoin to roughly $28,000, up from a previous $10,000, arguing that this revised level better aligns with historical price distribution. This update follows McGlone's earlier warning that a continued crypto selloff could signal broader financial stress, and that Bitcoin could fall toward $10,000 if U.S. equities peak and a recession ensues. Conversely, Chase Guo, a former Binance executive, predicts Bitcoin will reach a new all-time high this year. As reported by BeInCrypto, Guo argues that this move will be driven by liquidity dynamics rather than fundamentals, with capital flows, market positioning, and consensus playing decisive roles. Guo believes a liquidity squeeze, fueled by derivatives exposure and capital rotation, could push prices beyond previous highs. Against the backdrop of Bitcoin’s fixed supply, he suggests that even modest institutional or sovereign inflows could exert an outsized impact on price.