Crypto
Landmark ruling highlights need for Hong Kong’s crypto regulatory framework
The cryptocurrency industry has, at times, been described as a financial “Wild West”, freewheeling, volatile and resistant to regulation.
But the protection of investors and the development of an attractive environment for virtual assets are not mutually exclusive.
Hong Kong, with its aspirations to become a Web3 business hub, should be setting an example. The city has started work on a regulatory framework, intended to boost investor confidence, and is developing new rules.
When disputes arise, the courts also have an important role to play. Earlier this month, a landmark High Court ruling, described as a world first, took a step towards greater transparency and accountability.
The case concerns a battle over the ownership, management and control of a cryptocurrency finance project involving a decentralised autonomous organisation (DAO) that uses blockchain technology.
Plaintiffs who conceived and set up the project claim they delegated management to employees who then “misappropriated” its business and assets.
This is disputed by the defendants, who argue the ultimate decision-making power lies with purchasers of digital tokens, through voting rights, rather than any individual or entity.
The ownership issue is yet to be decided. But the court ruled, with the trial pending, the defendants must make the platform’s financial accounts available. This will be vital to any assessment of damages and preserves the status quo until the case is decided.
But the judge also referred to the importance of proper financial records being kept. This is fundamental to the running of a sound business and necessary to demystify the opaque nature of blockchain.
The ruling provides clarity and is consistent with the principle that new legal entities in the cryptocurrency field must be open to scrutiny.
As the judge said, the courts have little experience in dealing with disputes of this kind. But as the industry rapidly develops, we can expect more such cases in the future.
The ruling has led to a call for the government to regulate blockchain-based entities as part of ongoing efforts to attract investment and talent in the field.
This must be considered as the city moves forward with other regulatory measures, which include issuing licences for cyber currency platforms and amending laws to regulate stablecoins.
There is a need to strike the right balance between protecting investors and appealing to the industry. The scandal involving the JPEX platform, with more than HK$1 billion (US$128 million) in losses, is still fresh in the minds of Hong Kong people.
The city cannot afford to be complacent as it develops a regulatory framework while pushing ahead with efforts to make Hong Kong a centre for virtual assets.
Washington — The Senate is expected to take a key procedural vote Monday evening on a crypto regulation bill after Democratic opposition tanked an initial attempt to advance the measure earlier this month amid concern over ties between the digital asset industry and the Trump family.
The first-of-its-kind legislation, known as the GENIUS Act, would create a regulatory framework for stablecoins — a type of cryptocurrency tied to the value of an asset like the U.S. dollar. After the measure advanced out of the Senate Banking Committee with bipartisan support in March, Senate GOP leadership first brought the measure to the floor earlier this month. But the measure had lost Democratic support in the intervening weeks amid concerns about President Trump and his family’s business ventures involving cryptocurrency.
Senate Majority Leader John Thune said the upper chamber would try again to advance the legislation on Monday, while criticizing Democrats for blocking the measure from moving forward earlier this month, saying “this bill reflects the bipartisan consensus on this issue, and it’s had an open and bipartisan process since the very beginning.”
Thune, a South Dakota Republican, argued that Senate Democrats “inexplicably chose to block this legislation” earlier this month, while adding that “I’m hoping that the second time will be the charm.”
Nathan Posner/Anadolu via Getty Images
Since the failed vote earlier this month, negotiators returned to the table. And ahead of the procedural vote Monday, the measure saw backing from at least one Democrat as Sen. Mark Warner of Virginia advocated for the measure, calling it a “meaningful step forward,” though he added that it’s “not perfect.”
“The stablecoin market has reached nearly $250 billion and the U.S. can’t afford to keep standing on the sidelines,” Warner said in a statement. “We need clear rules of the road to protect consumers, defend national security, and support responsible innovation.”
Still, Warner pointed to concerns he said are shared among many senators about the Trump family’s “use of crypto technologies to evade oversight, hide shady financial dealings, and personally profit at the expense of everyday Americans,” after it was announced earlier this month that an Abu Dhabi-backed firm will invest billions of dollars in a Trump family-linked crypto firm, World Liberty Financial.
Warner said senators “have a duty to shine a light on these abuses,” but he argued “we cannot allow that corruption to blind us to the broader reality: blockchain technology is here to stay.”
Sen. Elizabeth Warren of Massachusetts, the top Democrat on the Senate Banking Committee, has been among the leading voices advocating for adding anti-corruption reforms to the legislation. Warren has outlined a handful of issues with the bill, saying that it puts consumers at risk and enables corruption. In a speech Monday on the Senate floor, Warren said her concerns have not been addressed and urged her colleagues to vote against the updated version.
“While a strong stablecoin bill is the best possible outcome, this weak bill is worse than no bill at all,” Warren said. “A bill that meaningfully strengthens oversight of the stablecoin market is worth enacting. A bill that turbocharges the stablecoin market, while facilitating the president’s corruption and undermining national security, financial stability, and consumer protection is worse than no bill at all.”
Whether the measure can advance in the upper chamber this time around remains to be seen. The measure fell short of the 60 votes necessary to move forward earlier this month, with all Senate Democrats and two Republicans — Sens. Rand Paul of Kentucky and Josh Hawley of Missouri — opposing. Paul has reservations about overregulation, while Hawley voted against the bill in part because it doesn’t prohibit big tech companies from creating their own stablecoins.
Sen. Bill Hagerty of Tennessee, who sponsored the legislation, defended the measure on CNBC’s “Squawk Box” Monday. He outlined that a lack of regulatory framework, which the bill would provide, makes for uncertainty — and results in innovative technology moving offshore. The Tennessee Republicans urged that “this will fix it,” while arguing that the bill has strong bipartisan support.
“We have broad policy agreement, Democrats and Republicans,” Hagerty said. “The question is can we get past the partisan politics and allow us to actually have a victory.”
Bitcoin has notched its highest-ever weekly close as crypto market momentum continues and the cryptocurrency is again nearing its all-time high.
Bitcoin (BTC) has closed at a weekly gain for the past six weeks in a row, and its most recent close at midnight UTC on May 18 was its highest weekly close ever at just below $106,500, according to TradingView.
Its last highest weekly close was in December when it reached $104,400. It later went on to reach an all-time high of $109,358 on Jan. 20, according to TradingView.
Bitcoin is now less than 3% away from its peak price and has gained 2% over the past 24 hours to trade around $104,730 at the time of writing.
Bitcoin also posted its highest-ever close in a 24-hour period on May 18. However, this is not the largest daily gain Bitcoin has made.
“Bitcoin just had its highest daily candle close… ever,” investor Scott Melker posted to X on May 19.
With a daily close above $105,000, “Bitcoin will develop a brand new higher high,” said analyst Rekt Capital.
Bitcoin’s weekly gains over the past six weeks are mirroring its gains in November when it added $30,000 in three of its largest weekly candles ever.
It has added around $12,000 so far in May, climbing from $94,000 to over $106,000 before it pulled back to around $105,400.
Related: BTC price to $116K next? Bitcoin trader sees ‘early week’ all-time high
Additionally, Arete Capital partner “McKenna” said the Coinbase premium had returned, which measures US sentiment by comparing the difference between Coinbase’s BTC/USD pair and Binance’s BTC/USDT equivalent.
The “strength of this bid on a Sunday night feels strange,” they said, adding its “possible someone knows some important news dropping next week.”
Bitcoin’s CAGR cools down
On May 18, analyst Willy Woo dived into Bitcoin’s compound annual growth rate (CAGR), noting that it was trending downward as the network continues to store more capital.
“BTC is now traded as the newest macro asset in 150 years, it’ll continue to absorb capital until it reaches its equilibrium,” he said.
Woo compared it to long-term monetary expansion of 5% and GDP growth of 3%, estimating that Bitcoin’s annual growth rate will be around 8% in around 15 to 20 years when it has settled.
“Until then, enjoy the ride because almost no publicly investable product can match BTC performance long term, even as BTC’s CAGR continues to erode.”
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New regulations threaten the security of the personal data of cryptocurrency users and may expose them to “physical danger,” the platform at the center of last week’s Paris kidnapping attempt has claimed.
“A ticking time bomb,” said Alexandre Stachtchenko, director of strategy at French platform Paymium, referring to the way information must now be collected during cryptocurrency transfers under EU rules.
He did not directly link this to a kidnapping attempt on Tuesday which, according to a police source, targeted the daughter and grandson of Paymium’s chief executive.
“If there is a leak of one of these databases from which I can find out who has money and where they live, then the next day it is on the dark web, and the day after there is someone outside your home,” Stachtchenko said. Data theft is commonplace. On Thursday, the leading cryptocurrency exchange in the United States, Coinbase, said criminals had bribed and duped their way into stealing digital assets from its users, then tried to blackmail the exchange to keep the crime quiet.
Instead of paying up, Coinbase informed US regulators about the theft and made plans to spend between $180 million and $400 million to reimburse victims and handle the situation.
Following the kidnapping attempt, Paymium issued a statement urging authorities to immediately reinforce the protection of companies within the sector, after other similar incidents this year.
Founded in 2011 and presenting itself as a European pioneer of bitcoin trading, Paymium also cited “the highly dangerous aspects of certain financial regulations, either recently adopted or in the making.”
It added, “With the unprecedented organization of massive and sometimes disproportionate collection of personal data, public authorities contribute to putting the physical safety of millions of cryptocurrency holders in France, and more widely in Europe, at risk.” In its sights are rules which came into force at the end of 2024 and which extended the Travel Rule in place for traditional finance transfers to include crypto assets.
The rules now require platforms to gather details about the beneficiary and, in return, transmit certain information about the customer to the receiving institution, including their name and postal address.
Also to be disclosed is the “address” of a customer’s cryptocurrency wallet, which shows details of their account and transactions, said Stachtchenko.
Such sensitive data is sometimes exchanged and stored insecurely by certain players.
Regulatory changes to tighten the rules on the crypto sector aim to “prevent the financial system from being used for corruption, money laundering, drug trafficking” among other criminal activities, said Sarah Compani, a lawyer specializing in digital assets.
Data collection is carried out by parties including banks, insurance companies and crypto-service providers, which are “supervised” and subject to heavy “security obligations, particularly IT and cybersecurity,” said William O’Rorke, a lawyer at cryptocurrency firm ORWL.
In 2027, European anti-money laundering regulations will restrict the use of wallets and cryptocurrencies that allow the holders to remain anonymous.
It follows a French law adopted last month to fight narcotrafficking, which targets anonymization devices such as the cryptocurrency “mixers” used to render funds untraceable.
There are many “legitimate interests” in having such tools however, said cybersecurity expert Renaud Lifchitz. He noted that they are sometimes used by journalists, or by activists opposed to an authoritarian regime which controls the traditional banking system.
The debate is more “political” than “security-related,” argued O’Rorke.
The recent kidnappings and attempted kidnappings can be explained above all by a “somewhat nouveau riche” and “ill-prepared” cryptocurrency sector, he said.
Since 2014, software developer Jameson Lopp has recorded 219 physical attacks targeting cryptocurrency users.
© 2025 AFP
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