South Korea intensifies scrutiny on cryptocurrency exchanges

Hong Kong's spot Bitcoin exchange-traded funds (ETFs) encountered their second day of net outflows since their launch on April 30. According to data published by crypto trading data platform SoSo Value, in excess of 90 BTC exited the Hong Kong ETFs on May 9. The data indicated that China Asset Management's spot Bitcoin ETF observed an outflow of 80.16 BTC, while the Bosera HashKey Bitcoin ETF recorded a lesser outflow of 10 BTC. Meanwhile, Hong Kong’s third spot Bitcoin ETF offered by Harvest Global registered zero flows.Photo by Dmytro Demidko on UnsplashThese daily net outflows follow a trend of net inflows that had developed in the preceding days, with the three ETFs collectively witnessing net inflows of 101.6 BTC on Wednesday and 99.99 BTC on Tuesday. As of Thursday, the three ETFs, managed by ChinaAMC, Harvest Global and Bosera with HashKey, held approximately 4,260 Bitcoin, with total net assets reaching $261.45 million, marking an increase from $247.7 million on the first day of trading. The total trading volume for the three ETFs amounted to $2.06 million on Thursday, a decline from $2.67 million the day prior and a significant drop from the $9.74 million recorded on April 30, according to SosoValue data. This recent outflow represents the second day of net outflows from these products since their launch on April 30.   The initial day of outflows occurred on May 6, with 75.36 BTC flowing out of the products. This marked the first setback for Hong Kong's Bitcoin ETFs following their launch on April 30.  The outflows on that occasion primarily stemmed from the China Asset Management Bitcoin ETF, while other Hong Kong-based products saw no flows. Potential Stock Connect additionMany commentators had expected these Hong Kong-based products to see inflows from mainland China. While that hasn’t materialized yet, Harvest Global CEO Han Tongli said that he doesn’t rule out the addition of its Bitcoin and Ether ETF products to Stock Connect.  Shanghai Hong Kong Stock Connect is a cross border investment channel that would open access to these products to investors that ordinarily invest in and trade products and equities listed within the Shanghai Stock Exchange (SSEC). Tongli made the suggestion to the South China Morning Post (SCMP)  while attending the Bitcoin Asia conference. He suggested that such an addition is a possibility if all goes smoothly over the course of the next two years. U.S. product outflowsIn the U.S., spot Bitcoin ETFs also saw net outflows on Thursday, amounting to $11.29 million. Farside data indicates that the Grayscale Bitcoin Trust (GBTC) witnessed a substantial $43.4 million redemption, marking its largest single-day outflow since May 2, totaling $17.5 billion in outflows overall. BlackRock’s IBIT has now accumulated $15.4 billion in total inflows. Additionally, other top-performing ETFs — Bitwise (BITB), Fidelity (FBTC) and ARK (ARKB) — also experienced inflows. In total, U.S. ETFs have witnessed $11.7 billion in cumulative net inflows.

XRP, the native asset of the XRP Ledger (XRPL), a blockchain network developed by Ripple Labs, is destined for further institutional adoption in Asia due to the launch of the region’s first XRP tracker fund. Crypto-focused institutional asset manager HashKey Capital recently announced the launch of its HashKey XRP Tracker Fund, which has been devised to track the performance of what is the world’s fourth-largest crypto asset by market cap, after Bitcoin (BTC), Ether (ETH) and U.S. dollar stablecoin Tether (USDT).Photo by Kanchanara on UnsplashEnabling institutional accessThe fund enables investors to gain exposure to XRP without having to take direct ownership and custody of the digital asset. Bitcoin and Ethereum exchange-traded funds (ETFs) have become popular in a number of markets, including the United States, as they allow institutional investors to gain exposure to these digital assets where they may have been uncomfortable with direct ownership due to concerns around custody and counterparty risk or regulatory concerns. According to HashKey’s press release, investors can buy into the fund through cash or in-kind subscription and subscribe or redeem shares monthly. The fund will be measured and compared against a benchmark index provided by CF Benchmarks, a provider of crypto-related indices. HashKey Partner Vivien Wong acknowledged the potential that XRP has in the market, stating:“XRP stands out as one of the most innovative cryptocurrencies in today’s market, attracting global enterprises who use it to transact, tokenize, and store value.”She added that the new fund simplifies access to XRP within the region, while catering to a growing demand for investment opportunities related to digital assets.Potential ETF fund conversionThis marks HashKey’s third product that tracks digital asset pricing, with the company having launched both Bitcoin and Ethereum exchange-traded funds (ETFs) previously. On X, HashKey Capital outlined that the XRP Tracker Fund could potentially evolve into a fully fledged ETF, subject to regulatory approval, within the next 1-2 years. The new fund, which was launched on April 18, also incorporates a strategic partnership with XRP developer Ripple Labs. In what is understood to be the first of a number of collaborations, Ripple will fulfill the role of being the fund’s anchor investor. Ripple’s Managing Director for the Asia-Pacific (APAC) region, Fiona Murray, cited the development as proof that institutional adoption of digital assets continues to go from strength to strength.  Ripple CEO Brad Garlinghouse stated last month that he expects a number of spot XRP ETFs to be approved in the United States later this year. Earlier in March, analysts at American investment bank JPMorgan had estimated that spot XRP ETF approval in the U.S. could result in net inflows of $8 billion into such products.At the time of writing, XRP was trading at $2.09. The asset has increased in price by 300% over the course of the past 12 months, largely due to a changing regulatory environment in the United States and optimism that a settlement can be reached to end its multi-year legal battle with the Securities and Exchange Commission (SEC).

Axie Infinity Teams Up with CyberKongz in Blockchain Gaming RevivalIn a bid to reinvigorate the world of blockchain gaming, Sky Mavis, the company behind the groundbreaking play-to-earn (P2E) blockchain game Axie Infinity, has announced an exciting partnership with CyberKongz, an Ethereum-based non-fungible token (NFT) collection.Together, they are set to develop a more comprehensive gaming ecosystem for the Ronin blockchain. Sky Mavis originated in Vietnam and came to prominence for developing the first major breakthrough for blockchain gaming within the crypto space. The company’s ties with Vietnam continue although it has since established its headquarters in Singapore.While the announcement, made via a blog post published on Tuesday, has sparked curiosity about a brand-new game on the horizon, specific details remain under wraps. Kathleen Osgood, Sky Mavis’ Head of Business Development, revealed that the upcoming game will be designed to be interoperable, seamlessly integrating with existing Axie Infinity experiences.Photo by Bestami Sarıkaya on UnsplashMoving to the Ronin blockchainBut the partnership goes beyond just creating a new game. It also includes the migration of CyberKongz’s popular Play & Kollect game, which is based on the Polygon blockchain. The move to the Ronin blockchain opens up new opportunities for CyberKongz to expand its user base and tap into Ronin’s thriving gaming community.Axie Infinity first captured the gaming world’s imagination in 2021 when it introduced the “play-to-earn” concept. This groundbreaking model allowed players to earn valuable cryptocurrency tokens while playing the game. It quickly became the leading project by sales volume in the burgeoning NFT space, according to data from CryptoSlam. On the other hand, CyberKongz also made headlines in 2021 when it impressively burned $4 million worth of Ether.However, since the NFT craze of 2021, interest in blockchain gaming has seen a decline, with some crypto-based games, such as Neopets, even transitioning to a non-crypto approach.Play-to-earn deficienciesSky Mavis Co-Founder, Aleksander Larsen, acknowledged earlier this year that the play-to-earn model needed improvement to thrive. He emphasized that games must prioritize fun and feature a robust economic system that enables players to earn rewards. Despite this, Kathleen Osgood remains optimistic that the blockchain gaming space can experience a revival through an experience that truly understands the motivations driving users towards Web3.According to Osgood, many teams in the space have merely attempted to replicate what worked in Web2, which may not be enough to drive explosive growth. Instead, she believes that attracting a massive audience lies in taking an innovative approach to leverage the unique offerings of Web3, appealing to users who are naturally drawn to its decentralized and rewarding nature.Gaming evolutionSky Mavis has started opening up its infrastructure to the Web3 ecosystem through the Ronin blockchain. By doing so, it hopes to create gaming communities that are not only more rewarding but also longer-lasting, fostering an environment of engagement and enthusiasm among players.As blockchain gaming continues to evolve, partnerships like the one between Sky Mavis and CyberKongz signal renewed efforts to iteratively improve on previous blockchain gaming models. With a new game on the horizon and the migration of CyberKongz to the Ronin blockchain, the stage is set for a new era of immersive and rewarding blockchain gaming experiences, building upon past efforts.