Generally a green week with BTC+2% and ETH+4 as we closed out May just under 1.2tn market cap. Top performers this week was INJ +29% after Avalon mainnet upgrade cause a bit of a short squeeze. On the flipside OP was one of the major outliers given significant token lockup -13% wow in line with PEPE -13% as the meme fever is fading. Despite us being in the winter and players continuing to downsize Hong Kong felt some excitement this week as the new licensing regime went live this week. On the adoption side we had a couple of interesting headlines this week. Sui Red Bull racing partnership, ANA the Japanese airline launched an NFT marketplace, and ICAP stared offering crypto spot trading. Enjoy reading!

Bat Tai Chi — [email protected]

With 1st of June SFC has finalised rules that will allow licensed exchanges to sell cryptocurrencies to retail in the city. It’s part of a highly anticipated move in the city’s drive to become a virtual-assets hub and for many a sign that there is implicit support from mainland.
Many exchanges were quick to announce that they have submitted applications amongst which you count Huobi, Gate, BitMex, OLS and many more have signaled interest. Initially you’d be only allowed to offer spot trading for major coins without leverage but of course the hope here is on the banking rails which have become a big burden for many given the US clampdown. Sparking excitement has also been a whitepaper dubbed the “Web3 Innovation and Development White Paper (2023),” that has been released by the Beijing Municipal Science & Technology Commission, an government affiliated entity. The document states that web3 technology is an “inevitable trend for future Internet industry development,” according to a report from local news outlet The Paper. Staying in Hong Kong First Digital launched FUSD a USD stablecoin on BSC.

Rumors have been flying this week that Binance is reducing it’s workforce by ~20%. Now anecdotally I’ve heard about reductions but size is hard to confirm. The fact that CZ and their communications officer went out of the way and explained however would suggest no smoke without fire. The exchange has been in a touch spot (like most venues given how much volumes have dropped) and so tightening the belt is very natural, that combined with their very rigorous and frequent KPI assessments. Already in 1Q Kaiko reported that Binace had lost significant market share and this was even before they stopped the zero fees BTC trading promotion. Having said that Binance is still the most dominant exchange and volumes are concentrated there.

Multichain ripple effects

Multichain drama continues after rumors surfaced that Chinese authorities had arrested several Multichain executives, including Chief Executive Officer Zhaojun. Binance amongst others was forced to respond to the news and suspend certain token deposits. The CEO is unreachable.
Further rumors about Gate.io suffering liquidity issues however the exchange officially denied the allegations. And the effects are also showing with chains heavily reliant on Multichains bridge like Fantom where multiple DeFi projects have started moving their treasury to other chains despite the foundation reassuring that the Multichain bridge is fully operational and safe with Fantom. Bridges always deal with multiple chains and so offer an exponentially higher attack surface so it is unfortunately no surprise we are continuing to add to the already >2.5bn of hacked value from bridges.

Our regulations will be tight

Eddie Yue Wai-man, Chief Executive of the Hong Kong Monetary Authority (HKMA)

Crypto is helping fund the fentanyl trade, and we have the power to shut that down

Elizabeth Warren, US Senator

Binance has a “bottom out” (we should probably rename it to something else) program. We constantly say goodbye to people who are not strong fits with the company. Many of them are great people or high performers, but may not fit our unique culture/situation. Small example, WFH is not for everyone.

CZ