Hong Kong has seen a rise in popularity of cryptocurrency exchange-traded funds (ETFs), with assets under management surpassing HKD 12 billion ($1.532 billion), according to Peishan Li, CEO and board member of Hang Seng Investment Management. The total assets of Hong Kong crypto ETFs have grown by 80% compared to December 2022, with a daily trading volume of HKD 1.7 billion. This represents 6% of the daily trading volume of all stocks on the Stock Exchange of Hong Kong. The Hong Kong Special Administrative Region allowed the listing of crypto ETFs in July 2022.
However, Binance co-founder Yi He warned investors against blindly following the trading signals from the community, noting that the prices of major altcoins have fallen by 80% to 90% recently. Yi He’s warning came after Binance listed the token of decentralized finance protocol Maverick, which saw a surge in price before slumping. Yi He also warned about the risks of token investment and emphasized the importance of conducting thorough research.
In a separate incident, Chinese DeFi protocol Poly Network announced it had been hacked again, with hackers exploiting a smart contract vulnerability. The breach affected 57 different asset types across 10 blockchains, with an estimated $42 billion worth of tokens minted. However, only $5 million has been cashed out so far. This is not the first time Poly Network has been hacked, as a similar incident occurred in August 2021, when hackers stole at least $600 million. In that case, the hacker returned most of the stolen funds and refused a $500,000 white hat bounty.
To promote the development of emerging Web3 technologies in Hong Kong, the SAR’s financial secretary, Paul Chan Mo-po, established a Web3 Task Force consisting of industry veterans, regulators, and government officials. The task force will focus on the sustainable and responsible development of Web3, including making proposals to the government. Chan emphasized that blockchain technology has the potential to solve many problems and improve various aspects of finance, transactions, business operations, and daily life. Animoca Brands CEO Yat Siu was appointed to the task force on July 3.
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The rise of cryptocurrency ETFs in Hong Kong demonstrates the growing interest and acceptance of digital assets in the region. With a significant increase in assets under management and daily trading volume, it is clear that investors are looking to diversify their portfolios and take advantage of the potential returns offered by cryptocurrencies. However, caution is advised, as the recent warning by Binance co-founder Yi He shows. Investors should always conduct thorough research and be aware of the risks associated with the volatile nature of the crypto market.
The hacking incident involving Poly Network highlights the ongoing security challenges faced by the crypto industry. Despite efforts to improve security measures, hackers continue to find vulnerabilities, causing significant financial losses. This serves as a reminder for investors and industry participants to prioritize security and take necessary precautions to protect their assets.
The establishment of the Web3 Task Force in Hong Kong demonstrates the region’s commitment to embracing and supporting the development of blockchain technology. By bringing together industry experts and regulators, the task force aims to ensure the responsible and sustainable growth of Web3 technologies. Hong Kong’s position as an international financial center makes it well-suited to explore the potential applications of blockchain technology in various sectors, including finance and business operations.
In conclusion, the rise of cryptocurrency ETFs, the warning against blindly following trading signals, the hacking incident involving Poly Network, and the establishment of the Web3 Task Force in Hong Kong all highlight the evolving landscape of the crypto industry in the region. As cryptocurrencies and blockchain technology continue to gain traction, it is crucial for investors, regulators, and industry participants to stay vigilant, adapt to new challenges, and work towards a secure and sustainable future for digital assets.
