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 adoption of cryptocurrency is significantly bolstered when large funds, such as pensions and endowments, begin investing. Notable among these are university endowments, which manage substantial assets for their respective institutions.

The University of Michigan is actively participating in cryptocurrency investments through the CNK Fund I, L.P., managed by Andreessen Horowitz. This fund targets “cryptonetwork technology companies across various stages, from seed to growth.” In June 2018, the University of Michigan’s endowment made an initial investment of $3 million into this fund. As of June 2023, the endowment’s total value was $17.9 billion.

Recent communications to the university’s Regents indicated additional investments in this fund, although the exact amount remains undisclosed, it is presumed to be in the millions.

The university’s rationale for this investment is based on the belief that “crypto has become an important area of innovation and entrepreneurship that warrants focused attention,” and as the opportunities related to cryptonetworks become more defined, the need for a separate thematic fund may diminish.

The University of Michigan is not alone in this venture. Yale University, with an endowment valued at $40.7 billion as of June 2023, contributed to a $400 million capital raise for a crypto fund from Coinbase (NASDAQ:COIN) and Pantera Capital in 2018.

Similarly, the Harvard endowment, the largest at over $50.7 billion as of June 2023, has also invested in cryptocurrency funds. As early as 2018, Harvard disclosed investments in “at least one cryptocurrency fund.”

Other prominent universities, including Stanford University, Massachusetts Institute of Technology, Dartmouth College, and the University of North Carolina, have also allocated funds to crypto or crypto-related investments.

Despite the initial wave of investments in 2018, follow-on investments and additional commitments have been made in subsequent years. As the cryptocurrency market evolves and becomes more accessible through avenues like spot ETFs, it is likely that endowments and large funds will continue to increase their crypto investments.

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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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For cryptocurrency to gain more value, wider ownership is crucial. Institutions investing directly in bitcoin or indirectly through spot ETFs, launched in January, can drive this growth. Some entities, like MicroStrategy (NASDAQ:MSTR), invest directly in bitcoin, while others, like the State of Wisconsin, invest indirectly. This trend is positive for cryptocurrency as it increases exposure to the asset class.

The State of Wisconsin Investment Board has invested over $160 million in spot bitcoin ETFs, allocating $98 million to BlackRock’s iShares Bitcoin Trust and $63 million to Grayscale’s spot bitcoin ETF. Although this is a small fraction of the board’s $156 billion in assets, it is significant since few large institutions invest in bitcoin.

The approval of these ETFs in January allows equity investors to gain exposure to bitcoin’s price movements without directly buying the cryptocurrency. The ETF sponsors purchase bitcoins and package them into shares, which are then sold to the public.

Bloomberg ETF analyst Eric Balchunas commented on the investment on X, noting that it is unusual for large institutions to invest in new ETFs so quickly. “Normally, you don’t see big institutions in the 13Fs for a year or so until the ETF gains more liquidity. These are not ordinary launches. This is a good sign, expect more institutions to follow, as they often move in herds.”

Balchunas speculates that more funds might invest soon, with Florida and Wyoming being likely candidates. These states are known for their pro-crypto stance and could lead their pension funds to invest in bitcoin or other cryptocurrencies.

The news coincides with increasing discussions about a spot Ethereum ETF, which, if approved, could further ease regulatory concerns and reinforce cryptocurrency’s stability as an investment.

This development marks a pivotal moment for crypto, suggesting that increased institutional interest could lead to broader adoption and a new era for the digital asset class.

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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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