Hong Kong regulator set to grant additional crypto exchange licenses

A spot Solana (SOL) exchange-traded fund (ETF) is set to debut in Hong Kong next week, according to the South China Morning Post. Managed by ChinaAMC (HK), the Hong Kong subsidiary of Chinese financial services company China Asset Management, the product will begin trading on Oct. 27 and will be available against both Hong Kong and U.S. dollars. The Hong Kong listing comes amid growing global interest in Solana-based investment products. While this marks a first for the city, the first country to trade a spot Solana ETF was Canada, where four products from 3iQ, Purpose, Evolve, and CI Financial went live on the Toronto Stock Exchange in April 2025.Photo by GuerrillaBuzz on UnsplashU.S. institutions await regulatory approvalIn the U.S., institutional interest is also high, though a product has yet to be approved. According to Bloomberg senior ETF analyst Eric Balchunas, 23 separate ETP filings for Solana have been submitted in the U.S. This matches Bitcoin, with both assets having the highest number of filings among 35 cryptocurrencies tracked, out of a total of 155 crypto ETP filings overall. The push for exchange-traded products mirrors rising institutional investment in the Solana ecosystem itself. Several firms have recently established corporate SOL treasuries. Forward Industries spent $1.6 billion on its treasury and filed with the U.S. Securities and Exchange Commission (SEC) to raise up to $4 billion from share sales to acquire more SOL. Similarly, Sharps Technology announced a collaboration with Coinbase Global to expand its reserve strategy, and an SEC filing showed that Citadel and its affiliates hold a portion of the outstanding shares in DeFi Development Corp. (DFDV), another SOL treasury firm. Uniswap expands to Solana networkSolana's platform has also seen wider technical integration. On Oct. 16, the decentralized exchange Uniswap began supporting the network, allowing its users to connect Solana wallets and swap SOL tokens. Uniswap stated the move helps address fragmentation issues by supporting both Solana and Ethereum, the two largest DeFi ecosystems. According to DefiLlama data, SOL currently boasts $10.88 billion in total value locked (TVL) in decentralized finance, while ETH TVL amounts to $83 billion. Separately, the Solana team recently promoted the network's technical resilience. Following a recent Amazon Web Services (AWS) outage, the team shared an analysis on X indicating a 97.6 resilience index, noting that only 77 of its 1,295 nodes were affected, suggesting a 6% dependency on AWS. Market performance lags despite growthDespite these developments, the price of SOL, the sixth-largest cryptocurrency by market capitalization, has not reflected the positive sentiment in the short term. Trading at roughly $186, SOL is down 13.74% over the past month, according to Kraken data. The asset remains 36.49% below its all-time high of $293.31, which was reached on Jan. 19, 2025.

Regulatory Caution Among Asian Nations Amid Reports of Illicit FinancingWith a plethora of reports of crypto-related terrorist financing having been published in recent weeks, it’s understood that Asian nations may be looking to exercise caution when it comes to the current ongoing process of establishing regulatory guidelines for crypto.That’s according to a report published by the South China Morning Post (SCMP) on Thursday. The use of cryptocurrency by Hamas to fund its attack on Israel is being seen as the catalyst that may drive authorities in various Asian nations to take a more cautious approach to regulating digital currencies, according to analysts cited by the publication.Raj Kapoor, the founder of India Blockchain Alliance (IBA), commented on these recent developments, stating:”It is a kick on the backside for most governments. All regulatory bodies will take a closer look at crypto regulation. Governments will need to start implementing new rules and regulations.”At the recent G20 summit held in New Delhi, a joint declaration called for the regulation, supervision, and oversight of crypto assets, among other measures. The declaration emphasized the importance of supporting “a coordinated and comprehensive policy and regulatory framework.”Kapoor stressed the importance of revisiting the declaration and developing solutions to implement its objectives.Photo by Adolfo Félix on UnsplashRenewed scrutinyEvents in Palestine in recent weeks have led to renewed scrutiny when it comes to monitoring illicit financing activity via cryptocurrency. Only days following the recent Hamas attack, Israeli authorities moved to freeze specified crypto accounts.That scrutiny has continued in recent days, with more accounts having been frozen on crypto platforms such as Binance, while more still have been identified as suspicious, with requests for further information having been submitted in respect of over 200 additional accounts.On Wednesday it emerged that the United States Treasury’s Office of Foreign Assets Control (OFAC) had sanctioned a Gaza-based crypto platform.Potential over-reactionWhile crypto-related terrorist financing has been widely publicized, blockchain analytics firm Chainalysis warned on Wednesday that crypto’s role in this illicit activity has likely been overstated. In its blog post on the subject, the firm stated:“Although terrorism financing is a very small portion of the already very small portion of cryptocurrency transaction volume that is illicit, some terrorist organizations raise, store, and transfer funds using cryptocurrency.”Additionally, Chainalysis stated that it had seen “overstated metrics and flawed analyses of these terrorist groups’ use of cryptocurrency.” Peter Van Valkenburgh, Director of Research at non-profit crypto advocacy group Coin Center, also believes that reporting on the matter is not balanced. Taking to X, he stated:“Sensational early reporting on the scale of Hamas crypto fundraising significantly misstated the amounts involved.”Coin Center’s Director of Communications, Neeraj Agrawal, highlighted an article which claimed that crypto “fueled Hamas’ terror attack on Israel” in its title, only to reveal within the body of the article that “cryptocurrency is still far from the largest funding source for terrorism.”Anndy Lian, a Singapore-based author and inter-governmental blockchain adviser, noted that while some countries may consider banning cryptocurrencies as a solution, this could merely drive illicit financing underground and make it more challenging to trace and halt. Lian argued that cryptocurrencies are traceable and trackable, unlike traditional fiat currencies like US dollars.

BOCI Partners with UBS in Hong Kong on First Tokenized NotesIn a groundbreaking move, the investment arm of the Bank of China (BOCI), has partnered with Switzerland-headquartered global financial services company UBS, to issue tokenized notes in Hong Kong.Photo by Eric Prouzet on UnsplashHong Kong’s first tokenized notesThis marks the first instance of a Chinese financial institution issuing a tokenized note in the region. Leveraging the power of blockchain technology, the notes were tokenized on the Ethereum blockchain. UBS announced the milestone development via a press release published to its website on Friday.The Swiss banking giant has some expertise in this area, having first issued a tokenized fixed rate note in December 2022, recorded on a permissioned blockchain and established under English and Swiss law. On this occasion, the Hong Kong-issued tokenized notes will be compliant in terms of both Swiss and Hong Kong law.The issuance of these tokenized notes involved a significant amount, with BOCI issuing 200 million Chinese yuan worth of notes, equivalent to approximately $28 million. The collaboration with UBS aims to simplify digital asset markets and products for customers in the Asia Pacific region, specifically by developing blockchain-based digital structured products tailored to their needs.Ying Wang, Deputy CEO at BOCI, expressed enthusiasm for the digital transformation and innovative development of Hong Kong’s financial industry, recognizing the evolving digital economy in the region. Wang expressed the view that the development puts BOCI “at the forefront of innovation in technology finance and digital finance.”She sees the UBS collaboration as a means of driving “the simplification of digital asset markets and products, for customers in Asia Pacific through the development of blockchain-based digital structured products, designed specifically for customers in Asia Pacific.”Embracing digital assetsHong Kong has been actively working towards establishing itself as a hub for cryptocurrencies. Paul Chan Mo-po, the Chinese autonomous territory’s Financial Secretary, has emphasized the region’s intention to embrace regulation in this domain. Despite recent fluctuations in the virtual asset market and the closure of certain virtual asset exchanges, Chan remains optimistic about the prospects of Web3 and believes it is the opportune moment to drive its advancement.This month, Hong Kong lifted its ban on crypto retail trading and encouraged crypto exchanges to seek licenses within the region. The Securities and Futures Commission (SFC) has introduced exchange guidelines, leading firms such as Huobi, OKX, and BitMEX to express their intentions to apply for licenses in Hong Kong. Furthermore, in light of the recent lawsuit filed by the SEC against Coinbase, Hong Kong legislator Johnny Ng extended an invitation to the exchange to establish a hub in Hong Kong.The collaboration between BOCI and UBS is significant as unlike UBS’ previous tokenized note project which was established on a permissioned blockchain, this Hong Kong-based project is making use of Ethereum. By issuing tokenized notes on the Ethereum blockchain, these institutions are exploring the decentralized potential of digital assets and paving the way for further innovation in the Asia Pacific region.