Token Cat authorizes up to $1B in corporate crypto purchases

Ethiopian Investment Holdings, the largest sovereign wealth fund in Africa, has announced the signing of a memorandum of understanding (MoU), which is suspected to involve a deal on Bitcoin mining. Deal uncertaintyTaking to LinkedIn on Feb. 15, the sovereign wealth fund outlined details of a partnership with Data Center Service, a subsidiary of Hong Kong’s West Data Group. Separately, Kal Kassa, CEO of Ethiopian operations at Hashlabs Mining, posted on the X social media platform, outlining that it was a stakeholder in the project and that it involved Bitcoin mining. The matter lacks full confirmation however, given that Kassa subsequently deleted his post while the sovereign fund’s statement falls short of mentioning Bitcoin mining. Once verified, the project would signify a substantial investment of $250 million. It’s understood that the investment would be directed towards the establishment of state-of-the-art infrastructure tailored for data mining and artificial intelligence (AI) training operations within Ethiopia.Photo by Kelly on PexelsExploiting abundant energy resourcesA key component of this venture may involve the setup of Bitcoin mining operations utilizing Canaan Avalon miners. This initiative would align with Ethiopia's broader strategy to capitalize on its abundant energy resources to attract international investment and stimulate economic growth.Ethiopia has about 5,200 MW of installed generation capacity, 90% of it coming from hydropower and the remainder from wind and thermal sources. While the official confirmation from the government is pending, the ambitious project has sparked both excitement and skepticism within the industry. Concerns linger regarding the energy-intensive nature of Bitcoin mining and its potential strain on the local electricity supply, an issue of particular relevance in a nation where energy accessibility remains a pressing challenge for many. Bloomberg reportEarlier this month, a report from Bloomberg highlighted Ethiopia as being a new haven for Chinese crypto miners. Following the imposition of a mining ban in China in 2021, many operations were redeployed overseas. Kazakhstan in particular was a popular choice. The Eurasian country wasn’t prepared for the influx, leading to power blackouts.Hashlabs Mining co-founders Jaran Mellerud and Alen Makhmetov both featured in the article. Mellerud outlined the difficulty, stating:“Firstly, countries can run out of available electricity, leaving no room for miners to expand. Secondly, miners can suddenly be deemed unwelcome by the government and be forced to pack up and leave.”Makhmetov outlined that he had a 10 MW facility in Kazakhstan which still sits idle today as curbs and taxes enforced in Kazakhstan on miners “basically killed the industry.” Despite these difficulties in Kazakhstan and China's official ban on cryptocurrency trading, the legalization of Bitcoin mining in Ethiopia in 2022 has spurred a notable influx of Chinese miners seeking new investment avenues. Ethiopia will need to be mindful of the difficulties experienced in Kazakhstan. With that, the Ethiopian government's move towards regulating cryptographic products, including mining activities, reflects a measured yet optimistic approach towards harnessing the economic potential of Bitcoin mining. This regulatory framework aims to strike a balance between fostering sector growth and safeguarding the country's energy security and environmental commitments.  

Hong Kong Legislator Courting US Crypto Exchange CoinbaseRecently, Johnny Ng, a member of the Hong Kong Legislative Council, expressed his interest in the future development of Coinbase, a major US cryptocurrency exchange, in Hong Kong. In a tweet today, Ng said that he had been in contact with Coinbase and that he would keep the public updated on further progress.Photo by Ruslan Bardash on UnsplashNg’s invitation to crypto exchangesThis tweet follows Ng’s earlier invitation to Coinbase and other global crypto trading platforms to apply for licenses in Hong Kong. His comments are in line with Hong Kong’s efforts to become a hub for cryptocurrency and blockchain-related activities. As of June 1, a new licensing regime for centralized virtual asset trading platforms (VATPs) went into effect in the Chinese special administrative region.Differing opinionsDespite the enthusiasm shown by Ng, there are differing opinions on Hong Kong’s current suitability as a crypto-friendly jurisdiction. Leo Weese, the co-founder and President of the Bitcoin Association of Hong Kong, expressed reservations in an interview with crypto media outlet CoinDesk.Weese described Hong Kong’s current setup as “highly unattractive” for crypto businesses. He cited factors such as a relatively small and untested market, limited banking partnerships, and restrictive product offerings.Despite these challenges, Weese acknowledged some potential advantages, stating that Hong Kong’s classification of tokens as non-securities allows for the trading of securities that are deemed unregistered in other jurisdictions. It is important to note, however, that Weese cautioned against assuming that moving operations to Hong Kong would protect Coinbase from US regulatory measures.Moody’s altered outlook on CoinbaseMeanwhile, Moody’s, the American credit rating agency, recently revised Coinbase’s outlook from stable to negative, citing uncertainties surrounding the impact of the US Securities and Exchange Commission’s (SEC) charges on Coinbase’s operation as an unregistered securities broker.

Cryptocurrencies tied to the family of U.S. President Donald Trump began trading on South Korea’s major exchanges on Monday. Upbit, the country’s largest exchange, listed WLFI—the native token of World Liberty Financial, a DeFi platform backed by the Trump family—and World Liberty Financial USD (USD1), a stablecoin the platform says is pegged 1:1 to the U.S. dollar and backed by dollars and government money market funds. Bithumb also listed both WLFI and USD1, while Coinone listed WLFI only.Photo by Scottsdale Mint on UnsplashFrom global listings to a volatile debutWLFI’s first session was volatile. It opened on Upbit at a floor price of 433.76 won ($0.31) and, roughly 17 hours later, was down about 25% at 323 won ($0.23) at the time of publication.Source: WLFI/KRW spot trading pair on UpbitThe Korean launch comes alongside listings on major global venues, including Binance and Coinbase. Until its exchange listings, WLFI holders had been unable to trade their tokens. The Wall Street Journal estimated the Trump family’s holdings, representing less than a quarter of the supply, to be worth close to $5 billion after the listing. Trump’s three sons are named as co-founders of World Liberty, which says tokens allocated to founders and team members will remain locked. President Trump is described as the project’s “co-founder emeritus.” Political controversy over crypto and holdingsThe project has drawn criticism from those who argue it could serve as a conduit for influence, with partners and investors seeking political favor. In April, Democratic lawmakers Senator Elizabeth Warren and Representative Maxine Waters warned the U.S. Securities and Exchange Commission that the family’s stake posed “an unprecedented conflict of interest” in oversight of the crypto industry. Later, White House press secretary Karoline Leavitt said, “Neither the President nor his family have ever engaged, or will ever engage, in conflicts of interest.” Controversy over public officials’ crypto exposure is not new. Recently, it was reported by The Chosun Ilbo that as of Aug. 14, Lee Eog-weon, nominee to chair South Korea’s Financial Services Commission (FSC), held 10 shares of Strategy, a Nasdaq-listed Bitcoin treasury company with 632,457 BTC in reserves. The disclosure indicates no legal violation because the holdings predate his nomination, but it highlights tension with his public views. In a letter to parliament ahead of his confirmation hearing, Lee questioned crypto’s intrinsic value and argued its volatility undermines its utility as a store of value or medium of exchange. If Lee were not seeking a government post, his holdings of crypto-related stocks would hardly surprise South Koreans. According to Money Today, citing data from the Korea Securities Depository (KSD), Korean investors increased purchases of crypto-related U.S. equities amid expectations of U.S. rate cuts. Bitmine Immersion Technologies—a Bitcoin miner that also accumulates Ethereum as a treasury asset—was the second-most purchased U.S. stock by Koreans in August, with net buys of $252.77 million, or 7.6% of all purchases among the top 50 U.S. stocks. Stablecoin issuer Circle ranked 10th at $92.62 million, and the GraniteShares 2x Long COIN Daily ETF, which delivers twice the daily price movement of Coinbase, ranked 11th at $90.74 million. In total, crypto-related stocks and ETFs accounted for 30.4% of the top 50 U.S. equity holdings by value. South Korea weighs spot ETFs amid investor surgePolicy is moving in tandem with market interest. Spot crypto ETFs have recently been elevated to South Korea’s national agenda, opening the door to potential approval. Analysts say such products could repatriate demand that has been flowing overseas. Kim Jin-young of Kiwoom Securities argues that expanded regulatory approval could reshape Korea’s capital market by widening investor access, drawing in institutional capital, stabilizing prices, and diversifying available crypto-linked products.