Hong Kong to bridge insurance and digital assets via new risk framework

Cango, Inc., a Shanghai-headquartered Bitcoin mining business which is publicly listed on the New York Stock Exchange (NYSE: CANG), provided a mining operations update on Aug. 5, disclosing a significant increase in its crypto production.Photo by Dmytro Demidko on Unsplash45% increase in outputThe update outlined that in June, the firm mined 450 BTC, while holding 3,879.2 BTC, with a deployed hashrate of 32 EH/s. The figures for July show a considerable uptick, with 650.5 BTC having been mined. That Bitcoin was retained, bringing the firm’s overall Bitcoin treasury holding to 4,529.7 BTC, with a deployed hashrate of 50 EH/s. Cango CEO Paul Yu outlined that the firm had added 18 EH/s in hashpower towards the end of June. This additional capacity accounted for the increased output experienced for the month of July, representing a 45% increase month-on-month. Yu stated: “This strong performance not only demonstrates our commitment to execution but also fuels our ambition to accelerate future production.” The Cango CEO added that a new and experienced management team is now in place, and with that, Cango is focusing on working towards transitioning to “a more diversified and resilient portfolio of mining sites and energy infrastructure." Cango isn’t the only company in the Bitcoin mining sector to up its production. Cipher Mining, an American miner with facilities in Texas, also published an update, indicating that it produced 214 BTC in July with a hashrate of around 20.4 EH/s, up 21.43% month-on-month. Cipher outlined that Black Pearl Phase I, the initial 150 MW tranche of its Black Pearl facility, came on stream last month, accounting for the increased output. Unlike Cango, Cipher sold 52 BTC as part of what it described as “its regular treasury management process.” In this respect, Cango bucked a trend in comparison with its industry peers. CryptoQuant reported that miners became significant sellers of Bitcoin in July, depositing 16,000 BTC to exchanges as of July 18.Ranked by BitcoinTreasuries.net in order of Bitcoin held, Cango now holds 18th place among corporations holding BTC.Originally an automotive transaction service platform operating within the Chinese market, Cango announced a new departure last November, with the signing of agreements to buy $400 million in crypto mining equipment from a number of vendors, including Bitmain. With crypto mining a banned activity in China, the company has deployed its mining operations at various locations across North America, South America, the Middle East and East Africa. By January, the company was being referred to as a “Bitcoin mining powerhouse.” At that time, the company’s Communications Director, Juliet Ye, told CoinDesk that the firm’s entry into the Bitcoin mining sector had surprised people, given that “nobody has ever heard of Cango before.” By April, Cango had sold its legacy auto-financing business for $352 million to a firm linked to Bitmain affiliate, Antalpha, allowing it to focus exclusively on mining. The company’s stock has surged 180% over the course of the last 12 months. Ye said that the Chinese firm’s pivot to Bitcoin mining has created a buzz around the company that had been absent previously.

Israel Doubles Down on Blocking Crypto Funding of HamasIn a move to disrupt the flow of funds to Hamas, Israeli authorities have ordered the closure of over 100 cryptocurrency accounts on Binance, the world’s largest crypto exchange.Photo by Leonid Altman on PexelsHeightened monitoring of crypto-related financingIsraeli authorities were already monitoring crypto accounts suspected of terrorism financing before the recent attack by the Palestinian militant group Hamas. Since then, they have requested information about hundreds of accounts on Binance, suggesting that the scale of their actions has grown significantly since October 7.A statement from Israeli police last week outlined that they had frozen crypto accounts related to financing of Hamas. According to a report on Tuesday by the Financial Times (FT), the Israeli authorities have taken matters further still, having closed more than one hundred accounts on Binance.Scrutinizing 200 additional accountsSources cited by the FT as being close to the situation have revealed that these actions were initiated in response to Hamas’s assault on October 7. Authorities have also sought information on approximately 200 additional crypto accounts, with most of them being held on Binance. While Binance has acknowledged blocking a “small number” of accounts since the summer, it emphasized its adherence to internationally recognized sanctions rules and declined to provide further comment.Governments and regulators have long expressed concerns that terrorist organizations might exploit lightly regulated crypto markets for financial transactions. However, the recent attacks on Israel and the subsequent crypto-based fundraising campaigns by Hamas have made these concerns more pressing.Tom Alexandrovich, the Executive Director at the Israel National Cyber Directorate, stated that cryptocurrency has become a major tool for terror financing during these times of conflict. He noted that the amount of crypto funds involved has significantly increased since the start of the attack.Tether freezes accountsTether, the issuer of leading US dollar stablecoin USDT, announced on Monday that it had frozen 32 addresses containing more than $873,000 due to their alleged links to “terrorism and warfare” in Israel and Ukraine. The exact timing of when these accounts were blocked and the distribution of assets between Israel and Ukraine were not disclosed.Notably, US financial regulators previously alleged that money held on Binance had ties to Hamas. A lawsuit by the Commodity Futures Trading Commission (CFTC) in the United States in March claimed that senior Binance executives had knowledge of “Hamas transactions” in 2019. Binance has refuted these allegations and expressed its intent to contest the lawsuit.Commentators within the crypto space fear that opponents of the development of crypto, like US Senator Elizabeth Warren, will try to capitalize on this issue by using the opportunity to further draconian regulation.Over the past two years, Israeli authorities have seized millions of shekels from crypto accounts with suspected ties to Hamas and other militant groups in the Middle East. A recent analysis by Elliptic found that crypto wallets associated with various suspicious Middle East groups have interacted and relied on the same crypto exchange services to convert crypto into sovereign currencies.

South Korea’s central bank, the Bank of Korea (BOK), plans to begin testing peer-to-peer (P2P) transactions with its central bank digital currency (CBDC) in October, according to the Seoul Economic Daily. This will mark the second phase of its ongoing CBDC pilot, Project Hangang, which currently allows 100,000 citizens to use digital tokens for payments at both online and offline stores. In the fourth quarter, the pilot will also introduce voucher programs enabling local governments to distribute welfare benefits.Photo by Mathew Schwartz on UnsplashSandbox deadline pressureThe BOK originally planned to gather feedback from participants in the first phase and refine the system before proceeding. However, the central bank decided to speed up the timeline, as the broader project is operating under a regulatory sandbox program that provides two years of regulatory flexibility. A BOK official noted, “Since the current test ends in June, we can’t wait too long to move forward. Also, the fourth quarter timeline is still tentative.” While the BOK focuses on its CBDC, Korean commercial banks are accelerating efforts to develop stablecoin infrastructure and launch related pilot projects, Edaily reported. These initiatives reflect growing expectations that stablecoins will become a key tool for cross-border payments. Banks see this as an opportunity to attract new customers and earn fees from crypto exchanges by facilitating stablecoin transfers through their own networks. One example is Project Pax, a joint initiative involving Shinhan Bank, Nonghyup Bank and Kbank, which is testing stablecoin transfers between South Korea and Japan. Led by Japan’s digital asset platform Progmat, along with Korea’s Fair Square Lab and Korea Digital Asset Custody, the project enables Korean banks to send won-based stablecoins to Japanese financial institutions and receive yen-pegged stablecoins in return. Rising stablecoin useAn executive at a local bank expressed concern that South Korea is falling behind in stablecoin adoption. He predicted faster uptake, noting that consumers can save time and money by avoiding traditional foreign exchange processes. He also cautioned that, without action, the private sector could take the lead in building cross-border payment networks, bypassing the traditional SWIFT system. Another banker urged financial authorities to establish clear regulations for stablecoins, stressing the need for oversight as stablecoins are increasingly used to move foreign currencies out of Korea. Contrasting perspectivesHowever, BOK Governor Rhee Chang-yong remains skeptical of stablecoins, arguing that CBDCs offer far greater transparency. He pointed to the volatility of unregulated stablecoins and warned that their widespread use—especially if issued by private financial institutions—could undermine the central bank’s role as the sole issuer of legal tender. That said, financial authorities appear to be exploring a regulatory framework where CBDCs and stablecoins can coexist. Sharing his personal view, one official noted that while the future of stablecoins is uncertain, it’s important to remain open to various possibilities. He added that agencies are also reviewing recent changes in U.S. federal law, along with regulations in Japan and the EU.