Cryptocurrency-trading - the price of bitcoin had dropped by 7.9 per cent to $61,842 – falling the previous day by $5,308 from its last closing price.

Cryptocurrency trading: Bitcoin drops below $62,000

In cryptocurrency trading, the price of bitcoin had dropped by 7.9% to $61,842 – falling the previous day by $5,308 from its last closing price.

This makes the largest and most widely known cryptocurrency in the world drop 16.2% from its yearly peak of $73,794 dug in on 15 March.

Ether, the cryptocurrency related to the Ethereum blockchain, similarly fell by 9.18% on Saturday to $2,930, losing the previous day $296.1 from its last closing price.

Cryptocurrency trading: Bitcoin ETFs

Money managers reported on Monday that Hong Kong had granted its first virtual cryptocurrency exchange-traded funds (ETFs) conditional approval, making the special administrative region the first Asian city to embrace bitcoin and ether as investment mainstream options.

Three offshore Chinese asset managers are preparing to launch exchange-traded funds that offer exposure to virtual asset spot ​​bitcoin and ether.

Harvest Fund Management and Bosera Asset Management, Hong Kong branches of two mainland Chinese companies, and China Asset Management’s Hong Kong unit, ChinaAMC (HK), have announced they have received conditional regulatory approvals from the Hong Kong Securities and Futures Commission (SFC) to launch the ETFs. ChinaAMC (HK) said it has received approval to offer virtual asset management services and is working on spot ETFs for bitcoin and ether.

Cryptocurrency trading: HKEX listing

In a Reuters response to this publication’s questions, the SFC disclosed that it gives a conditional letter of authorisation to an ETF should its application satisfy certain criteria on an ‘overall basis’ – subject to conditions, including notice payments, document submissions and the ETF getting the green light from HKEX for a listing.

The programme kicks off three months after the U ran its first ETFs tracking spot bitcoin that have already taken in roughly $12 billion net inflows. While cryptocurrencies are banned on China’s mainland, Hong Kong is positioning itself as a global digital asset hub and a leading international financial centre.

Bosera Asset Management pointed to two ‘double-edged swords’ – the virtual asset spot ETFs will help the city’s asset allocation and, beyond that, also enhance Hong Kong’s position as a world-class financial hub and a hub for digital assets.

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Bosera will roll out the product in partnership with HashKey Capital, a Hong Kong-based crypto fund.

Hong Kong will have the first mutual fund ETFs that will enable ‘in-kind’ subscription, so you can buy ETF shares directly with bitcoin or ether.

Cryptocurrency trading: Chinese banks to push crypto

It also seems to sit neatly with the needs of Chinese banks and other financial entities that are intensifying their investment in the development of crypto assets in Hong Kong, whose equity markets are proving difficult for many.

‘The conditional approval is in line with the SFC’s objective to facilitate industry innovation while safeguarding the interests of investors,’ said Han Tongli, the chief executive of Harvest Global Investments, one of Greater China’s largest fund houses, in a statement last week.

On Monday, Bitcoin was trading just below $66,000, having risen more than 50% this year and hitting an all-time high of $73,803 in March.

Cryptocurrency trading: Congress warns against virtual currencies

The US Treasury Department has warned that, without fresh regulatory powers from Congress, terrorist groups and some state actors would increasingly use virtual currencies to obscure their identities and move money.

In advance of a Senate Banking, Housing, and Urban Affairs Committee hearing, Wally Adeyemo, the deputy secretary of the Treasury, testified that, while terrorists preferred traditional financial services, ‘gaps in virtual asset regulation could encourage more terrorists and their supporters to turn to these technologies, especially when they watch Russia, North Korea, and terrorist groups such as al Qaeda or Hamas innovate new ways to use them to bypass traditional financial sector oversight and sanctions.

Adeyemo said that, in the digital realm, the Treasury is having some success in disrupting illicit flows of funds, but that much more robust enforcement capabilities are also badly needed.

Treasury said North Korea is using increasingly sophisticated cyber operations and ‘mixers’ for money laundering, while Russia is increasingly turning to alternative means such as stablecoins to evade sanctions and try to fund its war against Ukraine.

Cryptocurrency trading: Sanctions on service providers

Adeyemo stressed that this would require a legislative vote giving the Treasury greater power to impose secondary sanctions on foreign digital asset service providers and fill regulatory loopholes by explicitly covering entities such as virtual asset wallet providers and cryptocurrency exchanges that have appeared since current laws were passed.

Bringing offshore cryptocurrency exchanges that could threaten the national security interests of the US under legislative regulation was also recommended.

Meanwhile, Adeyemo wrote that Coinbase Global and Circle Internet Financial have asked Senate leaders to regulate stablecoins and US digital asset market structures to stop illicit finance while ‘preserving the competitiveness of US companies that operate in compliance with financial regulations’. The companies have also stressed the need to extend anti-money laundering and sanctions regulations to foreign stablecoin issuers that use US dollars to avoid regulatory arbitrage.

Finally, Adeyemo noted that the Treasury had already sent over ‘recommendations for reforms that address several matters of mutual interest to both the Committee and the Department and we look forward to engaging with the Committee on these matters going forward.’

The US Securities and Exchange Commission (SEC) informed one of the largest global cryptocurrency exchanges in the world that it plans to take enforcement action against its main operator, Uniswap Labs, according to a blog post by the company on 8 June.

The blog post didn’t specify what reasons led the SEC to make this move, but this possibly will be part of the SEC’s campaign to apply US securities regulation to digital asset companies that have been initiated with action against Coinbase.

The SEC has so far been silent on cryptocurrency trading with regards to Uniswap.

The issue of Uniswap’s regulatory status mirrors that at Uniswap’s larger pitted rival, Coinbase, the biggest US listed crypto exchange, which is fighting the SEC over the notion that digital assets are investment contracts, and hence within SEC jurisdiction.

The blog post from Uniswap, published just days after the action, complained of the SEC’s ‘ongoing lawsuits against Coinbase and others’ affirming its belief that: ‘The [SEC] failed to provide sufficient clarity and guidance for lawful operations in the US and showed us that today’s move is part of its political agenda against even the most lawful of actors in crypto and blockchain technology.’

Uniswap is a ‘market-making’ facility for DeFi. To recap: DeFi refers to decentralised finance, run on open, peer-to-peer ‘distributed’ networks that cut out centralised financial middlemen such as banks or brokerages. These networks include developers, traders and ‘liquidity providers’.

The billionaire cryptocurrency entrepreneur Sam Bankman-Fried, found guilty last year in connection with a $8 billion fraud scheme that involved the collapse of his cryptocurrency exchange, FTX, is attempting to overturn the 25-year prison term he faces by filing an appeal.

Bankman-Fried’s attorney, Marc Mukasey, announced the decision at a sentencing hearing on 28 March, a month after the jury found Bankman-Fried guilty on seven counts of conspiracy and fraud in a case federal prosecutors described as the worst financial fraud ever prosecuted by the United States.

The trial, presided over by U.S. District Judge Lewis Kaplan in Manhattan, drew a strong appeal that could reach the U.S. Supreme Court in May. Bankman-Fried’s lawyers argued that Kaplan made errors that deprived him of his constitutional right to a fair trial.

Bankman-Fried’s lawyers asked for a sentence of five years and three months, far less than the 40- to 50-year prison term that prosecutors were seeking.

The judge ordered a sentence of 25 years.

Cryptocurrency trading: Bankman-Fried punished

The case of Bankman-Fried, who built a cryptocurrency and trading empire over the course of a couple of years and amassed a net worth of $26 billion, at least by the calculations of Forbes magazine, before reaching the age of 30, was just such an illustration – until FTX filed for bankruptcy in November 2022 amid a customer panic triggered by revelations about financial mismanagement.

After his arrest in the Bahamas in December 2022, Bankman-Fried was then extradited to the United States.

Many of his former close associates turned against him and testified at his trial, alleging that he directed them to divert FTX funds to pay off debts, and to use the money for buyouts and other unapproved purchases. Bankman-Fried pleaded guilty only to poor risk management but insisted that he had committed no theft.

His sentencing saw him fall from an exalted position as a big political donor, as well as an effective altruist.

The motion references continued frustration with prosecutorial tactics and notes ‘the inconsistency of sentencing in the cryptocurrency space, especially in light of [a] vastly different sentence [that was handed down to one of the lead defendants in this case, the founder of Binance, Changpeng Zhao] in connection with multiple other charges related to anti-money laundering violations’.

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