The launch of crypto exchange-traded funds (ETFs) in Hong Kong fell short of expectations, with trading volumes significantly lower than anticipated.

Trading volume for Hong Kong’s crypto ETFs totaled just over $11 million, with bitcoin ETFs accounting for $8.5 million and ether ETFs for $2.5 million. This figure paled in comparison to initial projections, which had suggested volumes exceeding $100 million, as reported by local media.

While Hong Kong allows ether ETFs in its market, regulators in the Chinese territory do not share the same concerns about ether being classified as a security, unlike their counterparts in the U.S.

In contrast, the launch of a U.S. ether ETF faces delays due to regulatory uncertainty. The Securities and Exchange Commission (SEC) has not provided clarity on whether ether qualifies as a security, causing postponements in listing such ETFs.

Ether ETFs are already listed on the Toronto Stock Exchange through issuers like Evolve and Purpose Investments.

On the first day of trading in the U.S., the total volume for ether ETFs reached $655 million. Meanwhile, bitcoin prices experienced a slight decline of over 1%, trading near $62,100, according to CoinDesk Indices data.

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Switzerland-based Backed has successfully closed a $9.5 million fundraising round, with Gnosis leading the investment charge.

According to one asset management company’s forecast, the tokenized real-world asset market could reach a staggering $10 trillion by the decade’s end.

Backed, a tokenized asset issuer, announced on Tuesday that it secured $9.5 million in funding, with Gnosis at the helm of the investment. Other participants in the fundraising round included Exor Seeds, Cyber Fund, Mindset Ventures, Stake Capital Ventures, Blockchain Founders Fund, Blue Bay Capital, and Nonce Classic.

The company plans to utilize the investment to accelerate its private tokenization offering and onboard asset managers onto blockchain platforms, as stated in the press release.

The fundraising round comes at a time when the tokenization of real-world assets  is emerging as a prominent trend in the digital asset industry. Crypto firms and global banking and asset management giants are actively vying to tokenize traditional financial instruments like bonds, funds, or credit on blockchains.

Tokenization offers several advantages over traditional financial systems, including enhanced trade settlement efficiency, broader investor access, and reduced administrative burdens. According to a report by asset manager 21.co, the market for RWAs could potentially reach $10 trillion by the end of the decade.

Backed, headquartered and regulated in Switzerland, specializes in tokenization services and has already issued over $50 million worth of tokenized RWAs. These include ERC-20 compatible token versions of exchange-traded funds and individual stocks such as Coinbase (NASDAQ:COIN) and Tesla (NASDAQ:TSLA), as listed on its website.

“Youbin Kang, CEO of Nonce Classic, one of the investors in the round, commented, “Global financial markets are fragmented, hindering accessibility and efficiency. Backed aims to solve these issues by bringing RWAs on-chain.”

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In response to mounting regulatory pressure, Wasabi Wallet and Phoenix have ceased operations for customers in the United States. The companies behind these wallets, zkSNACKs and ACINQ respectively, announced the suspensions following recent actions taken by U.S. authorities against similar cryptocurrency services.

zkSNACKs has taken proactive measures to block access to its services from U.S. IP addresses, including Wasabi Wallet. Meanwhile, ACINQ intends to remove Phoenix Wallet from U.S. application stores by May 3.

These decisions underscore the companies’ efforts to comply with potential regulations that could classify self-custody wallets as money services businesses, subjecting them to stringent regulatory oversight.

The regulatory crackdown on cryptocurrency services intensified following the arrest of two individuals associated with Samourai Wallet on charges of money laundering, including funds derived from illicit sources such as the Silk Road marketplace.

The U.S. government’s enforcement actions against Samourai Wallet led to the seizure of its web servers and domain, along with the removal of its app from the Google Play Store in the U.S.

Keonne Rodriguez, co-founder of Samourai Wallet, was granted release on a US$1 million bond after pleading not guilty to charges of money laundering and operating an unlicensed money-transmitting business at the U.S. District Court for the Southern District of New York.

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South Korea is taking proactive measures to address the surge in cryptocurrency-related crimes by considering the transformation of its temporary crypto-crime investigative unit into a permanent department, as per a local report. The nation witnessed a substantial increase in suspicious transaction reports from crypto companies, prompting the government to enhance its efforts in combating fraudulent activities.

According to a report by Segye Ilbo, the Justice Ministry and the Ministry of the Interior and Safety are set to begin discussions in early May regarding the elevation of the Joint Virtual Asset Crime Investigation Unit to an official department. By formalizing the unit’s status, which currently operates under the Seoul Southern District Prosecutor’s Office, South Korea aims to bolster its effectiveness through the appointment of additional prosecutors and budget allocation.

Established in July 2023, the unit comprises approximately 30 experts from seven financial and tax regulatory authorities, marking South Korea’s first dedicated investigative body focused on digital asset crimes. According to a February report by South Korea’s Financial Intelligence Unit, the country has observed a significant increase in crypto-related criminal activities. Local crypto companies reported 16,076 suspicious transactions in 2023, marking a 49% surge from the previous year.

Moreover, South Korea is set to implement its inaugural comprehensive crypto regulation on July 19, aimed at safeguarding investors. The new regulation imposes stricter penalties for market manipulation, including the possibility of life sentences in certain cases. These initiatives underscore South Korea’s commitment to curbing illicit activities in the cryptocurrency space and fostering a safer environment for investors and stakeholders.

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Ether has demonstrated strong performance against Bitcoin for two consecutive weeks, indicating a growing interest in altcoin gains following recent market developments, according to analysts at Bitfinex. Despite bitcoin’s halving event, ether recorded a notable 7.5% increase in its trading pair with BTC, marking its most significant weekly gain against bitcoin since early January.

Bitfinex’s Alpha report underscored ether’s resilience, even amidst regulatory challenges. Concerns regarding the potential SEC classification of ether as security and scrutiny over the Metamask software have raised uncertainties in the market. Nevertheless, ether’s ability to outpace bitcoin suggests a shifting sentiment among investors and market dynamics within the altcoin space.

The decline in bitcoin dominance further supports this narrative, with attention gradually shifting towards altcoins following the halving event. Historically, such events have prompted a surge in altcoin activity, leading to a decline in Bitcoin’s dominance. Currently, bitcoin’s dominance stands at 50.5%, while ether commands a dominance of 15.9%, according to Coingecko data.

Meanwhile, early Monday trading saw a significant depreciation in the Japanese yen, prompting bitcoin to trade at a slight premium against the weakening currency. On the Japanese crypto exchange bitFlyer, the bitcoin-Japanese yen pair traded at a 0.2% premium to bitcoin’s dollar-denominated price on Coinbase. However, as the yen rebounded amidst speculation of intervention by the Bank of Japan, the BTC/JPY pair retreated to trade at 9,797,502 JPY at the time of reporting.

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