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The crypto industry is never far from the spotlight and the market continues to turn heads while rallying from its 2022 lows. This week we’ve seen the elusive Terra creator, Do Kwon, formally charged by the SEC, the resurgence of NFT trading and heightened interest in digital bonds. The crypto market is at a crossroads, and stakeholders worldwide are watching the sector with bated breath to see its next move.
Hong Kong’s regulatory body takes a step towards legalising retail crypto trading.
China sent shockwaves through the blockchain industry in 2021 when it banned all forms of crypto trading, mining and ownership. However, being a Special Administrative Region, Hong Kong was largely exempt from these sweeping laws, and implemented its own restrictions on its crypto community. The biggest limitation was for retail investors, who were locked out of trading digital currencies on centralised exchanges.
This week, Hong Kong’s Security and Futures Commission (SFC) released a document proposing an overhaul to the current system. The key takeaways are:
Hong Kong loosening its hold on crypto restrictions may have a significant impact on the overall sphere. Some consider HK’s new regulation to be too tight, while others think it’s a step toward the Asian market adoption of crypto assets. The outcome hinges on how Mainland China responds to the news. If they react positively, the crypto market might see an influx of retail and institutional investors.
So far, so good.
Ordinals, digital assets encoded onto a Satoshi, are revolutionising the Bitcoin network.
For most of its life, the Bitcoin blockchain has been associated with digital transactions and little more. However, coders have begun to inscribe Ordinals onto Satoshis, allowing BTC holders to reference digital art much like an NFT. On the 17th of February, there were some 123k Ordinals written into the Bitcoin blockchain. Less than a week later, that figure breached 154k.
In the same vein, Litecoin’s blockchain hosted its first-ever NFT last week. This is a big deal for legacy blockchains like Bitcoin to demonstrate their ability to evolve with fast-changing digital times.
Tokenised bonds are jostling with Bitcoin Ordinals for “flavour of the month” status.
Bonds have been a staple of the traditional financial markets since the beginning of modern civilisation in Mesopotamia, in 2400 BC. These loan products, typically issued by governments or institutions, are often considered a “safe” middle ground between savings accounts and stocks. The tokenisation of this asset class presents a whirlwind of benefits for investors, including:
German brand SIEMENS was one of the first to introduce a whopping $64M tokenised bond via the Polygon blockchain. The bond has a maturity date of 12 months. Other bodies, such as the Hong Kong Government and European Investment Bank have followed suit and offered digitised bonds.
NFTs continue their resurgence into 2023, with Blur landing the number one spot for trading volume of all dApps in the last seven days.
Since its inception in 2017, OpenSea has had a vice-like grip on the mantle of the most popular NFT trading platform. For the first time ever the NFT marketplace has faltered, dropping to second place for weekly trading volume behind Blur’s NFT platform.
This news ultimately bodes well for the health of the NFT industry, which had long been subject to a monopoly. Blur boasted a 361% increase in activity through the past week, while OpenSea’s volume edged upward by 12%. The Ethereum NFT market has seen an overall boost of 155% over the last seven days, largely on the back of big investors flipping blue-chip digital tokens (such as Yuga Labs’ land plots) and the BLUR airdrop.
YouTube’s new CEO is considering a blockchain-based overhaul to how content creators are compensated.
Youtube’s long-standing Chief Product Officer, Neal Mohan, was promoted last week to CEO of the world’s largest video hosting service. Youtube has always been at the forefront of digital innovation, and its integration with blockchain-based tech seems closer than ever after Mohan spoke publicly for the first time since his appointment.
Mohan has a range of ideas on how web3 can be leveraged to improve the Youtube product. Fast, secure, global digital payments can unlock a host of new monetisation opportunities for content creators. Fan engagement could be shaken up by implementing a metaverse-like platform for watching live gaming. Although right now most of these ideas are just that – ideas – YouTube’s CEO being interested in blockchain’s future is a great sign for the industry going forward.
Do Kwon has been on the run from South Korean authorities for six months, and can now add the SEC to the list of global officials chasing him.
Do Kwon, the infamous founder of Terraform Labs, was officially charged by the SEC last week on counts of fraud. Kwon rose to notoriety in 2022 when his company’s “stable”coin, TerraUSD, collapsed, resulting in the loss of $40b in investor assets. The disaster wasn’t just a technical oversight – Kwon lied to investors about TerraUSD’s implementation into a Korean payments app (which never actually happened).
Although the SEC has formally charged Kwon, it isn’t particularly meaningful as nobody knows where he is. The last piece of intelligence as to his whereabouts came in December 2022, when South Korean authorities suggested he was hiding out in Serbia. In spite of all this, Kwon has maintained his innocence via Twitter, blaming Sam Bankman-Fried and “bad actors associated with fiat” for Terra’s demise.