Hong Kong crypto ETFs’ rise to popularity

During a June 28 interview with Hong Kong’s public broadcast agency Radio Television Hong Kong, Peishan Li, chief executive and board member of Hang Seng Investment Management, disclosed that digital asset ETFs listed in the Special Administrative Region (SAR) of China have now surpassed $12 billion Hong Kong dollars ($1.532 billion) in assets under management (AUM). Li noted:

“At present, there is no clear goal [from our firm] to create an ETF with the theme of virtual assets, but it has paid close attention to the development of related asset classes, and is examining the possibility of deploying virtual currencies in existing investment products.”

According to figures provided by Li, the total AUM of Hong Kong crypto ETFs grew by 80% compared to Dec. 2022, with a daily trading volume of $1.7 billion HKD. This represents 6% of the daily trading volume of all stocks on the Stock Exchange of Hong Kong. The SAR previously allowed the listing of crypto ETFs in July 2022, which initially struggled in traction.

Binance co-founder warns of altcoin rout

On July 2, Binance co-founder and former Chinese television host Yi He warned “please don’t trust the community’s trading signals [that] blindly chase higher prices,” noting the price of major altcoins “have fallen by 80% to 90%” in recent times. The warning came just days after the exchange listed MAV, a permissionless decentralized finance token, and offered perpetual MAV contracts at 20x leverage.

Launched in March of this year, Maverick boasts an advanced automated market maker liquidity provider network, securing a $9 million founding round in June. The protocol is backed by prominent names such as Jump Crypto, Pantera Capital, Circle, and Gemini. Since its launch, the protocol has reached nearly $55 million in total value locked.

Shortly after the listing, MAV skyrocketed to $1.98 a piece on Binance before slumping to $0.43 apiece at the time of publication, which is still significantly above its initial listing price of $0.05. She wrote:

“According to the history of previous cycles, the first day of IEO [Initial Exchange Offering] is several times [return], and it is not in line with the current market situation to pull it up to 10 times or 20 times [return]. Please DYOR [Do Your Own Research]

Amid the retail frenzy, the Binance co-founder also warned, “The price of tokens is not controlled by Binance. The price is affected by both buyers and sellers. Please pay attention to investment risks.” Despite a thaw in crypto markets, the marketcap of coins and tokens excluding Bitcoin, has remained stagnant over the past year at around $550 billion.

Though not nearly as popular as her counterpart, Changpeng Zhao, Yi He is responsible for the overall marketing strategy and the brand image of Binance and is credited with the exchange’s rise to prominence, now serving the additional role of director of Binance Labs. She also happens to be Zhao’s partner, both on a business and a romantic level and they have two children together.

Chinese DeFi protocol hacked yet again

On July 2, Chinese DeFi protocol Poly Network announced it had been hacked yet again, with the breach affecting as many as 57 different asset types across 10 blockchains.

According to DeFi security analyst @0xArhat, hackers allegedly exploited a smart contract vulnerability allowing them to mint an unrestricted amount of tokens from Poly Network’s multi-chain pools. An estimated $42 billion worth of tokens were minted, although only $5 million have been reportedly cashed out. Developers wrote:

“We kindly request the assistance of cybersecurity professionals and individuals with relevant knowledge. If you possess any information that could aid us in this endeavor, we encourage you to actively contact us.”

Shortly after the hack, the total value locked on Poly Network plunged from $277 million to $176 million. Previously in August 2021, hackers stole at least $600 million from Poly Network in what cybersecurity firm SlowMist called “a long-planned, organized and prepared attack.”

Just two days later, however, the hacker returned almost all of the stolen funds and refused a $500,000 white hat bounty, saying, “I will send all of their money back,” and that the hack was just “for fun” because “cross-chain hacking is hot.”.

Hong Kong launches Web3 Task Force

On June 30, Hong Kong announced the establishment of a Web3 Task Force spearheaded by Paul Chan Mo-po, the SAR’s Financial Secretary. The team is comprised of 15 industry veterans, along with regulators and government officials, all with a term of two years. According to officials, the Web3 Task Force will be dedicated to the sustainable and responsible development of emerging Web3 technologies in Hong Kong, along with the submission of proposals to the government.

Chan commented: “The blockchain technology behind Web3 has the characteristics of disintermediation, security, transparency and low cost, and can solve many difficulties and pain points in finance, transactions, business operations and even life.” He continued that “an international financial center” and a “metropolis” such as Hong Kong should embrace the development of Web3, though albeit under “suitable regulation.”

On July 3, Animoca Brands’ CEO Yat Siu was appointed to the Task Force. Previously, the crypto executive stated that crypto VC [Venture Capital] is only struggling “from an American perspective” and that the industry is actually “very vibrant” in both the Middle East and Asia.