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In the news…
Hong Kong Lifts Crypto Trading Restrictions
After being banned in 2021, retail crypto trading is once again legal in Hong Kong in a pursuit to become a leading tech and economic hub in Asia.
Cryptocurrency’s rocky relationship with Hong Kong is set to write a new chapter with the region unbanning crypto trading for retail clients from today, 1 June. Hong Kong’s financial regulatory body, the Securities and Futures Commission (SFC), decided to legalise digital currency trading for the first time in two years, after the Chinese government banned crypto trading in 2021. The decision comes on the back of lengthy discussions with industry stakeholders.
The primary purpose of Hong Kong’s updated stance is to turn the region into an economic hub for Asian cryptocurrency investors – a major gap in the industry since China banned local crypto exchanges in 2017. So far, only a couple of centralised platforms have registered with the SFC to begin operating within Hong Kong: OSL Exchange and HashKey Pro. However, more are likely to follow with Huobi and OKX recently applying for the local licence.
China is the most populous and one of the richest nations in Asia, and many investors from the region have been barred from accessing the digital currency markets. It’s the hope of many pundits that the introduction of retail crypto trading in Hong Kong will spur regulatory action in China, leading to a flood of new buyers on the market. Of course, China has been notoriously stubborn on the issue of cryptocurrency, so it remains to be seen whether the new legislation will have much of an effect on the broader crypto industry. Only time will tell.
XRP network activity reaches historic high
Rumours swirling that XRP’s court case with the SEC is coming to an end sparks significant rally.
In the midst of XRP’s protracted legal battle with the heavy-handed Securities and Exchange Commission, the blockchain has something to celebrate – hitting an all-time high for network activity. According to blockchain data from Santiment, the XRP protocol experienced record-high spikes in transactions on consecutive days.
What is Ripple and XRP?
Over just four days – 26 May to 29 May – the number of active wallet addresses on XRP networks catapulted from 18,090 to 490,350. This is a rather astonishing 2,600% increase in activity. The XRP native token has enjoyed the upswing in interest, seeing 7-day gains of approximately 14%. This has led to the cryptocurrency re-breaching the US 50c barrier for the first time in over a month. The bullish performance represents a 4% variance from the price movements of other altcoins, suggesting the heightened activity may continue.
There are no exact metrics that explain XRP’s blockchain suddenly hitting an all-time high for address activity. The most compelling argument is the company’s CEO, Brad Garlinghouse, hinting that their court case with the SEC might finally be coming to a resolution. However, nothing has been confirmed.
Nevertheless, the surge in network activity is nothing but good news for XRP holders and crypto enthusiasts in general. XRP coming out on top of the SEC would be a landmark day for the industry and set a precedent for the legitimacy, under securities law, of digital currencies within the United States, with the effects potentially rippling onto many other nations.
Ledger puts controversial recovery service on hold
Ledger’s new “Ledger Recover” service grinds to a halt after facing serious backlash from the community.
Ledger is well-known in the industry for providing one of the safest and most trustworthy storage solutions for serious cryptocurrency investors – the Ledger Nano hardware wallets. However, their reputation has taken a hit in recent weeks after the team announced the new Ledger Recover product. Amid “so much anger, so much hate” from community members on social media, the company has decided to halt the product rollout while they attempt to address key issues with its makeup.
Ledger is taking a leaf out of basically every modern-day company and offering a subscription-based seed phrase recovery service. The idea is that users can tie their identity – through a passport or a similar document – to their Ledger accounts. Then, the user’s seed phrase is split into three encrypted fragments, with each being controlled by a “trusted” custodian. Naturally, crypto users did not take too kindly to the idea of their non-custodial wallets suddenly becoming custodial. All for the low price of $9.99 a month.
One Reddit user voiced their concerns: “I’m in disbelief about this. Apart from the risks that they (Ledger) are hacked again, apart from it flying in the face of never sharing your seed and never storing it online, it opens the door to a whole new level of crypto scammers! Ledger, please reconsider this”.
Or, as another Reddit user quipped: “Ledger have invented the room-temperature wallet. Not cold, not hot”.
The disastrous release of Ledger Recover caused the CEO to enter damage control. The team hosted a Twitter-based “Town Hall”, pledged to become more transparent going forward and claimed to have been “humbled by the reaction of the community”.
Bali Enforces Strict Ban on Crypto Payments, Tourists Warned of Firm Action
The popular holiday destination is cracking down on travellers using digital currencies, with the governor stating anyone using crypto as payment will be “dealt with firmly.”
Bali Governor Wayan Koster hosted a press conference on the 28th of May to inform tourists paying their way with crypto will be “dealt with firmly”. The illegal use of digital currencies like Bitcoin and Ethereum in Bali can result in some pretty serious consequences, including potential jail time. “Strict actions range from deportation, administrative sanctions [and] criminal penalties,” the governor’s statement warned.
The press conference comes on the back of an investigative report from Kompas, a highly-respected Indonesian national newspaper. The 26 May article uncovered several Balinese businesses that catered to tourists were accepting, and even promoting, the use of cryptocurrency for payment. These services ranged from tour guides, motorbike rentals, a meditation retreat and even a cafe. The majority of the companies were based in Ubud, a tourist hotspot known for its temples and rainforests.
Indonesia has a relatively murky regulatory stance on crypto. The nation allows retail investors to trade digital assets on centralised exchanges, as well as engage with DeFi-based platforms. However, use of anything other than the Indonesian rupiah (IDR) as legal tender is considered illegal.
In spite of the nation’s hard-line stance on spending digital currencies, the country is paradoxically quite crypto-friendly. In a seemingly bizarre twist, the news comes on the back of the Indonesian government rolling out a nationally-endorsed crypto exchange in the coming months. The platform will be managed by Indonesia’s Ministry of Trade.
