Author: Faith Yakubu

OKX, one of the largest cryptocurrency exchanges globally, has opted to withdraw its application to operate in Hong Kong, marking a notable development in the regulatory landscape.

In a recent announcement, OKX cited strategic considerations for its decision to withdraw its application for a Virtual Asset Service Provider (VASP) license in Hong Kong. The exchange emphasized that this move followed careful deliberation of its business strategy.

As a result of this decision, OKX will cease providing centralized virtual asset trading services in Hong Kong by May 31. However, customers will retain the ability to withdraw their funds from the platform.

This withdrawal comes amidst a trend of other applicants retracting their applications from the approval process. Notably, earlier this month, several applicants, including the Hong Kong-based subsidiary of HTX and Huobi Hong Kong, followed suit by withdrawing their applications with the Securities and Futures Commission.

The Securities and Futures Commission is currently reviewing license applications from numerous major cryptocurrency exchanges, including Crypto.com and Bullish, the owner of CoinDesk. However, the regulator has only approved two exchanges thus far, with the latest approval granted in 2022.

OKX’s decision to withdraw its application underscores the evolving and complex regulatory environment surrounding cryptocurrency exchanges. As the industry navigates these regulatory challenges, exchanges must carefully evaluate their strategies and adapt to ensure compliance and sustainability in the long term.

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The US Securities and Exchange Commission (SEC) has made a groundbreaking decision by greenlighting the potential launch of eight exchange-traded funds (ETFs) tied to ether, the world’s second-largest cryptocurrency. This move comes on the heels of the SEC’s earlier approval of bitcoin ETFs, marking a significant shift in the regulatory landscape for digital assets.

The approval of ether ETFs represents a notable departure from the SEC’s historical stance on the cryptocurrency industry. Legal victories, such as Grayscale’s successful challenges against the SEC’s rulings, have played a pivotal role in prompting the agency to reconsider its approach to spot ETF applications.

Crucial rule changes paved the way for the SEC’s approval, enabling ETFs to directly invest in ether, the native cryptocurrency of Ethereum. Major financial institutions including BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton have received the regulatory green light. However, further approvals are required before these products can officially enter the market.

The SEC’s decision follows months of anticipation, with the regulator unexpectedly providing feedback on pending applications earlier in the week. This swift action is likely in response to looming deadlines for responses to ether ETF applications.

The anticipation surrounding these approvals has triggered a surge in ether’s price, soaring over 20% since Monday and more than 60% since the beginning of the year. This surge underscores investors’ growing confidence in the mainstream acceptance of cryptocurrencies.

Ether currently commands a market capitalization exceeding $450 billion, constituting approximately 18% of the total cryptocurrency market value, according to CoinMarketCap data cited on Yahoo Finance.

Industry experts have hailed the SEC’s approval of spot Ether ETFs as a watershed moment for crypto adoption within capital markets. Sergey Nazarov, co-founder of Chainlink, emphasized the significance of Ethereum ETF approval in fostering mainstream adoption. Sumit Gupta, Co-founder of CoinDCX, described the SEC’s decision as a maturing regulatory environment conducive to mainstream adoption.

The SEC’s approval lays the groundwork for the potential inclusion of ether in investment portfolios, including retirement accounts and pension plans. Furthermore, this development is expected to buoy bitcoin prices, which have already been gaining traction since receiving approval earlier this year.

In Washington, a bill aimed at reducing the SEC’s influence on crypto regulation and establishing the Commodity Futures Trading Commission (CFTC) as the primary regulator for cryptocurrencies has passed the US House of Representatives. This legislative initiative reflects evolving attitudes toward crypto regulation and underscores the dynamic nature of the regulatory landscape.

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In a largely partisan vote, the U.S. House of Representatives has moved to prohibit the Federal Reserve from launching a central bank digital currency (CBDC). The bill, known as the CBDC Anti-Surveillance State Act, was introduced by Majority Whip Tom Emmer (R-Minn.), with concerns raised by Republicans regarding the potential for a U.S. CBDC to infringe on Americans’ privacy and autonomy.

Democrats, on the other hand, argued during the debate preceding Thursday’s vote that these concerns were exaggerated and that banning the development of a digital dollar would hinder innovation and research in the public sector. Ultimately, the bill received support from 213 Republicans and three Democrats, while 192 Democrats opposed it.

This vote stands in stark contrast to the bipartisan support witnessed the day before, when 71 Democrats joined 208 Republicans in passing the Financial Innovation and Technology for the 21st Century Act. This bill, focused on crypto market structure, aims to grant the U.S. Commodity Futures Trading Commission increased authority over digital assets’ spot market and delineate the Securities and Exchange Commission’s approach to the sector.

The passage of the FIT21 Act was celebrated by industry stakeholders as a significant milestone, signaling growing recognition of the crypto industry’s importance in the United States. Kristin Smith, head of the Blockchain Association, described it as a “watershed moment” for the crypto sector, while Nicole Valentine, director of FinTech at the Milken Institute, hailed it as a “welcome step.”

However, both the market structure bill and the anti-CBDC legislation face uncertain prospects in the Senate, where neither has a clear counterpart. With half of Congress lacking a companion for either piece of legislation, it appears likely that both bills may stall in the Senate, limiting their potential impact on the regulatory landscape surrounding cryptocurrencies.

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Ethereum experienced a remarkable rally on Monday, marking its largest daily gains in three years and surpassing industry giants like Mastercard and LVMH in market capitalization. The surge was triggered by increasing speculation regarding the Securities and Exchange Commission’s (SEC) potential approval of a spot Ethereum exchange-traded fund (ETF).

News of the heightened probability of SEC approval for a spot Ethereum ETF sparked a frenzy of buying activity for ETH, driving its price from under $3,100 to over $3,800 within 24 hours. This significant surge, the largest since May 2021, reflects growing optimism among investors regarding the potential ETF approval.

The momentum was further fueled by a post from Eric Balchunas, a Bloomberg ETF analyst, who raised the probability of spot Ether ETF approval to 75%, citing emerging discussions within the SEC. Balchunas’ post quickly gained traction, amassing nearly five million views and igniting speculation within the crypto community.

The unexpected news surrounding the potential approval of spot ETH ETFs propelled Ethereum’s market cap to over $450 billion, positioning it among the top 20 companies worldwide by market capitalization. Notable companies that Ethereum surpassed include Mastercard (NYSE:MA), LVMH (LVMUY), Procter & Gamble (NYSE:PG), Samsung (KRW), and Bank of America (NYSE:BOA).

However, the approval process for ETFs is not straightforward, as it involves multiple forms and regulatory considerations. While the SEC may greenlight the 19b-4 forms allowing funds to list the ETFs, a decision on the detailed S-1 forms could be delayed. This approach would provide regulators with additional time to evaluate individual applications and understand the implications of ETF launches.

Despite the potential for regulatory complexities, many crypto enthusiasts remain optimistic about Ethereum’s prospects, anticipating a price surge beyond $4,000 and even new all-time highs above $4,900 in the event of spot ETF approval. Similar to Bitcoin’s price trajectory following ETF approvals, Ethereum could experience significant upside momentum.

As the crypto market awaits further developments, the potential approval of spot ETH ETFs could catalyze Ethereum’s continued growth and market dominance in the digital asset space.

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A surge of enthusiasm permeates cryptocurrency markets as hopes for the approval of exchange-traded funds (ETFs) directly investing in Ether soar, signaling a notable shift in sentiment.

The positive outlook coincides with a flurry of developments involving potential ETF issuers, stock exchanges facilitating their trading, and the US Securities and Exchange Commission (SEC). Sources familiar with the matter revealed that the SEC requested updates to rule change filings from the New York Stock Exchange and Cboe Global Markets, indicating a potential uptick in the likelihood of approval. However, the outcome remains uncertain, underscoring the complexities involved.

Fidelity Investments recently amended its S-1 registration statement with the SEC for its proposed spot-Ether ETF, addressing key concerns such as staking and derivative investments. This move precedes a looming May 23 deadline for the SEC to review VanEck’s ETF application, adding to the anticipation.

Analysts view potential ETF approval as a significant regulatory milestone, with expectations of substantial inflows into Ether upon implementation, akin to the impact observed with Bitcoin ETFs. Geoff Kendrick of Standard Chartered estimates inflows ranging from $15 billion to $45 billion within the first year post-approval.

The Grayscale Ethereum Trust (ETHE) serves as another barometer of market sentiment, with its discount to underlying Ether holdings narrowing significantly, reminiscent of patterns observed before the approval of Grayscale’s Bitcoin Trust conversion.

Ether’s recent price surge, coupled with heightened probabilities of ETF approval, reflects growing optimism among investors. While the SEC refrains from commenting on specific filings, stakeholders eagerly await developments in this evolving landscape.

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