5.31 AI Daily Report: Crypto Assets market turbulence, stricter regulations trigger industry transformation.

1. Headline

1. The upcoming listing of the Ethereum ETF has sparked heated discussions in the industry.

The Ethereum spot ETF is expected to be listed in the United States within the next few weeks, attracting widespread attention from the industry. According to reports, asset management company REX Shares has submitted a prospectus for Ethereum and Solana staking ETFs to the U.S. Securities and Exchange Commission (SEC). These funds use a unique C-corporation structure, which may become a pathway to obtaining SEC approval.

Analysts believe that the launch of the Ethereum ETF will provide institutional investors with a new channel to participate in the cryptocurrency market, likely driving capital inflows and boosting the price of Ethereum. Meanwhile, the emergence of staking ETFs will also promote the development of the Ethereum network, offering it more economic incentives.

However, there are also views that the initial listing of the ETF may trigger some selling pressure. In addition, the regulatory stance on cryptocurrencies remains uncertain, and the launch of the ETF may be subject to strict scrutiny. Overall, the Ethereum ETF has garnered significant attention, and its listing will have a profound impact on the entire cryptocurrency ecosystem.

2. Follow-up on the Cetus hacking incident: funds have been transferred to a multi-signature wallet.

The decentralized exchange Cetus in the Sui ecosystem, which suffered a $2.2 billion hacker attack, has released the latest updates. The affected funds have been safely transferred to a multi-signature wallet jointly managed by Cetus, the Sui Foundation, and the security company OtterSec. This marks the official entry of Cetus into the next phase of the recovery process.

The Cetus project plans to complete a full recovery in about a week, including protocol upgrades, data recovery, and restarting smart contracts, as well as fully restoring all suspended product functions. To keep the community informed at all times, Cetus will hold a public meeting on June 2 to review the events and share the recovery progress.

Analysis indicates that this incident highlights the security risks of decentralized exchanges and tests the risk-resilience of the Sui ecosystem. Whether Cetus can successfully restart will determine users' level of trust in it. At the same time, hacker attacks will also drive the industry to strengthen security construction and improve risk control mechanisms.

3. Meta shareholders vetoed the inclusion of Bitcoin as a reserve asset

At the annual shareholders' meeting on May 30, Meta( shareholders voted against a proposal to include Bitcoin in the company's $72 billion cash reserve. The final voting results showed that the opposition received 4.98 billion shares, while the support garnered only 3.92 million shares.

Analysts believe that this result reflects the significant doubts traditional companies still have regarding cryptocurrency. Incorporating Bitcoin as a reserve asset would increase the company's investment risk exposure, potentially affecting financial stability. Meanwhile, the uncertainty of the regulatory environment has also deterred companies.

However, there are also views that suggest that as the cryptocurrency ecosystem continues to develop, more companies may incorporate digital assets as reserve assets in the future. This decision will benefit companies by diversifying investment risks and enhancing the flexibility of asset allocation. Overall, the attitude of traditional companies towards digital assets is gradually changing.

) 4. Dogecoin price rebounds, traders optimistic about the future

The highly watched Dogecoin price has recently rebounded, and traders are optimistic about its future prospects. Analysis shows that Dogecoin has formed an ascending triangle on the daily chart, which is a bullish signal. If it can break through the key resistance level, Dogecoin's price is expected to rise by 42.5%, with a target price of $0.29.

The main factors supporting the rise in Dogecoin prices include increased community activity and greater mainstream adoption. In addition, against the backdrop of a general rebound in the cryptocurrency market, Dogecoin, as a well-known "meme coin", will also benefit.

However, some analysts are cautious about the long-term prospects of Dogecoin. They believe that Dogecoin lacks practical application scenarios, and its price fluctuations are mainly driven by speculative trading, which may be difficult to sustain in the long run. Overall, Dogecoin is expected to continue its upward trend in the short term, but the long-term trend still has uncertainties.

5. Observations from the TOKEN2049 Conference: The Industry Seeks Breakthroughs

The recently concluded TOKEN2049 Singapore event attracted over 7,000 companies and more than 20,000 attendees from over 150 countries, becoming an annual highlight in the industry. On-site observations revealed that the entire cryptocurrency industry is currently in a downturn, with entrepreneurs and investors experiencing significant confusion and uncertainty about the industry's future.

On one hand, in the past year, popular sectors such as full-chain games, NFTs, and WeSocial have frequently encountered setbacks and their development has slowed down; on the other hand, traditional business models such as "go online - exit and lie flat" also face significant challenges, and the industry urgently needs innovative breakthroughs.

At the same time, emerging sectors such as artificial intelligence and meme are rising, attracting considerable attention from project parties and capital. Analysis suggests that the industry is at a turning point and needs to re-examine its development logic and explore sustainable business models. In the future, the ability to nurture truly outstanding projects will determine the long-term development direction of the industry.

2. Industry News

1. Bitcoin's short-term pullback has triggered market fluctuations, and investor sentiment is cautious.

The price of Bitcoin experienced a short-term pullback on May 31, briefly falling below the 104,000 USD mark, with a 24-hour decline of 1.83%. This correction occurred against a backdrop of increasing market uncertainty, primarily stemming from a resurgence in US-China trade tensions. Trump accused China of violating trade agreements, leading to declines in the stock and cryptocurrency markets.

Analysts believe that the short-term pullback of Bitcoin has triggered a cautious sentiment among investors. Although the long-term fundamentals of Bitcoin remain strong, it may face further adjustment pressure in the short term. Trading volume data shows that the total liquidation amount across the network in the past 24 hours reached as high as $944 million, with the majority being long position liquidations. This reflects that market participants are reducing leverage and lowering risk exposure.

However, there are also analysts who hold an optimistic view on Bitcoin's future. Notable analyst Sherpa stated that Bitcoin is still in a strong bull market trend and is expected to rebound after the recent correction. Overall, the short-term decline in Bitcoin has triggered market volatility, and investor sentiment has become cautious. However, the long-term outlook remains positive, with the key being to closely monitor the developments of macro factors such as trade conditions.

2. Ethereum repeats testing support level in 2024, analysts optimistic about mid-term outlook.

The price of Ethereum maintained a key support level of $2,600 on May 31, forming a technical pattern of an ascending triangle. Analysts are closely watching whether it can break through the resistance level of $2,720.

Data shows that the Ethereum ETF has received $435 million in inflows under the easing of tariffs. At the same time, the moving average signals also indicate bullish momentum. These factors support Ethereum's medium-term upside potential.

However, some analysts have pointed out that Ethereum's performance in the 2023-2025 cycle has declined compared to previous periods, with changes in volatility and capital flow patterns. Although network activity and futures data are strong, signs such as weak demand and ETF fund outflows are worth noting.

Overall, Ethereum has tested the support level for 2024 repeatedly, forming a positive technical pattern. Analysts are optimistic about the medium-term outlook but also warn to closely monitor changes in demand, regulation, and other factors to guard against potential risks.

3. Solana faces whale selling pressure, SOL price tests key support at $140

The Solana ecosystem is facing increasing selling pressure from whales recently, causing the price of SOL to drop to the key support level of $140. Analysts warn that if strong support is not found at this level, the price of SOL may further depreciate and emit short-term bearish signals.

The main reason for this wave of sell-off is that the Solana ecosystem will unlock approximately $600 million worth of SOL tokens between June and August. This will undoubtedly bring heavy selling pressure to the market. At the same time, the Solana ecosystem also faces fierce competition from other public chains, with issues such as user loss and slowed ecological development that need to be addressed.

However, there are still analysts who are optimistic about Solana's long-term prospects. The data shows that Solana outperformed Ethereum in 30-day decentralized exchange trading volume, reflecting that it is still somewhat competitive. Solana's long-term outlook will depend on market conditions, demand absorption, and progress in the ecosystem.

Overall, the Solana ecosystem is currently facing significant selling pressure, with the price of SOL testing key support levels. Investors need to closely monitor the token unlock situation in the coming month and assess potential downside risks. However, in the long run, there remains considerable uncertainty regarding Solana's development prospects.

4. Altcoins are generally declining, and investor sentiment is frustrated.

On May 31, driven by the pullback in Bitcoin and Ethereum prices, the total cryptocurrency market capitalization shrank to $2.55 trillion, with a 24-hour decline of 1.1%. Mainstream altcoins such as XRP, Solana, and Dogecoin generally fell, impacting investor sentiment.

Analysts pointed out that the decline of altcoins is mainly due to market concerns about the macroeconomic situation. The renewed escalation of Sino-US trade tensions and high inflation have exacerbated investors' risk aversion, leading to capital outflows from high-risk assets.

However, some analysts are optimistic about the prospects of certain altcoins. For example, Dogecoin has fallen 7% in the short term, but analysts expect it to rise by 1010%, primarily based on positive factors such as mainstream adoption and community support. Additionally, some analysts are optimistic about XRP's potential to break into the $18-23 range in the short term.

Overall, altcoins generally fell on May 31, and investor sentiment was hit. However, the long-term prospects of some popular coins are still favored by certain analysts. Investors need to carefully assess risks and pay attention to how changes in the macro situation affect the altcoin market.

5. The liquidation data from cryptocurrency exchanges has raised warnings, and investors need to manage their risk exposure.

On May 31, the liquidation data from cryptocurrency exchanges raised alarms in the market. Data shows that the total liquidation amount across the network reached as high as $944 million in the past 24 hours, with long positions accounting for the vast majority.

Analysts point out that a large number of liquidations mean that market participants are reducing leverage and controlling risk exposure. This reflects investors' cautious attitude towards the current market's uncertainty and volatility. The clearing of $3.7 billion in open contracts to reset the market reflects a healthy market adjustment and reduced leverage levels.

However, some analysts believe that excessive deleveraging may lead to liquidity exhaustion, thereby exacerbating market volatility. Therefore, investors need to seek a balance between risk control and maintaining liquidity.

Overall, the large amount of liquidation data from cryptocurrency exchanges has triggered warnings in the market. This indicates that investors are taking risk control measures, but it may also bring liquidity risks. Investors need to carefully assess their own risk tolerance, manage their risk exposure well, and closely monitor changes in market liquidity.

3. Project News

1. Smart AI attracts international capital attention, promoting the intelligent evolution and integration of AI + NFT ecological development.

Smart AI, as an innovative AI intelligent NFT + metaverse platform in the blockchain sector, has quickly attracted international capital attention since its launch. The platform breaks through the traditional static limitations of NFTs through its self-developed AI-driven NFT intelligent evolution technology, cross-chain infrastructure, and dynamic pricing governance mechanism, achieving a leap from NFTs to intelligent digital partners.

Smart AI's cooperation with Fireverse, dappOS, Siren and other projects further proves the important position of Smart AI in the decentralized AI ecosystem, promoting the integration of AI with DeFi, the metaverse and other fields. Its SAIT token staking mechanism continues to be active, reflecting users' recognition of the long-term value of the platform.

Smart AI's innovative technology endows NFTs with intelligence and dynamism, promising to drive the evolution of NFTs from digital collectibles to intelligent digital partners. Its cross-chain infrastructure helps create an AI + NFT integrated ecosystem, injecting new vitality into the digital world. Industry insiders believe that Smart AI is likely to become a leader in the AI + NFT space, leading a new era of intelligent digital assets.

With the AI + NFT sector entering a period of explosive growth, Smart AI, leveraging technological innovation and capital advantages, is expected to become a leader in the new era of intelligent digital assets.

2. Solana launches an open-source application toolkit to simplify mobile app development on iOS and Android.

On May 31, Solana introduced the Solana Application Toolkit through its official X page. This open-source framework is designed for developers to build Solana mobile applications. It uses React Native to create iOS and Android applications with integrated Solana features. Developers can build production-ready applications in 15 minutes.

The toolkit supports integration with over 18 protocols, including Solana Pay, Candy Machine, Metaplex, and more. It also offers features such as wallet integration, token transfers, and NFT minting. Solana states that the toolkit is designed to reduce the complexity of mobile application development and promote the growth of the ecosystem.

The Solana ecosystem has been working hard to expand its application scenarios. By launching a mobile application toolkit, Solana hopes to attract more developers to join and promote innovation in mobile applications. This initiative is expected to extend the Solana ecosystem to mobile, bringing users more mobile experiences.

Industry analysts believe that Solana's move reflects its emphasis on the development of its ecosystem. With the launch of the toolkit, more mobile applications are expected to emerge, further enriching the Solana ecosystem and enhancing its influence in the blockchain field.

3. Cetus: Sui's isolated funds have been transferred to a multi-signature wallet jointly managed by the Sui Foundation and OtterSec.

Mars Financial News, Cetus Protocol, a Sui ecological decentralized exchange that was previously hacked, posted on the X platform that after the on-chain vote was approved, the funds previously isolated on Sui have now been safely transferred to the multisig trust wallet jointly managed by Cetus, Sui Foundation and OtterSec, and are now officially entering the next stage of the recovery process. To keep the community informed and engaged, a Space meeting is tentatively scheduled for June 2 to recap the hack and share the progress of the recovery.

Cetus Protocol is the first decentralized exchange launched in the Sui ecosystem, which was hacked on May 19, resulting in the theft of approximately $23 million in funds. After the incident, the Cetus team took emergency measures immediately, isolating the remaining funds and suspending the operation of the exchange.

The transfer of isolated funds to a multi-signature wallet aims to ensure the safety of the funds and prepare for subsequent recovery efforts. The Cetus team stated that they will continue to cooperate with security companies to fully recover the stolen funds. At the same time, they will strengthen security audits and defense mechanisms to work towards rebuilding community trust.

Industry insiders point out that the Cetus incident once again highlights the importance of blockchain security. As an emerging ecosystem, Sui needs to strengthen infrastructure construction and risk prevention. Only by ensuring safety and reliability can it attract more users and funds to enter, promoting the healthy development of the ecosystem.

4. Heurist launched the AI research platform Deep Research built on the x402 payment protocol.

Deep Research Foresight News reports that the decentralized AI infrastructure project Heurist has announced the launch of Heurist Deep Research, an AI research platform built on the x402 payment protocol launched by Coinbase. The platform can simultaneously scan over 100 online resources, cross-reference on-chain data with social sentiment analysis, and generate comprehensive multi-page research reports within minutes. It employs a fixed pricing model of 1 USDC per query. The platform operates on the x402 protocol, supporting a settlement time of 200 milliseconds and micropayment functionalities. Users can directly use USDC to pay for query fees on the Base mainnet without needing to subscribe or set up an API key.

Heurist is a decentralized AI infrastructure project aimed at providing developers with high-performance, privacy-preserving, and scalable AI services. The launch of the Deep Research platform showcases Heurist's innovative practices in the field of AI research.

By utilizing the x402 payment protocol, Deep Research has achieved efficient micropayments and instant settlements. Users can access AI research services on demand without prepayment or key setup, greatly enhancing the user experience. The launch of this platform is expected to promote the popularization and commercialization of AI research services.

Industry insiders believe that the emergence of the Deep Research platform reflects the innovative application of blockchain technology in the field of AI. Through decentralization and micropayments, AI services are expected to become more efficient and accessible. In the future, similar innovations are likely to promote further integration of AI and blockchain, injecting new momentum into industry development.

5. NFKings has received investment support from YZi Labs and other institutions, and plans to launch a new RWA protocol ecosystem.

ChainCatcher news, the Web3 startup NFKings, supported by YZi Labs under YZi Labs, plans to launch a new RWA protocol ecosystem. NFKings was founded in 2021 by Matthew Lim and Mario Ho, and has received support from several well-known funds and institutions, including YZi Labs, Binance China, FTX Team Holding, Mirana Ventures, Ventech, The Brooker Group, and PopMart's founders. The company's self-developed ONA Protocol serves as the core protocol, building infrastructure and tools that connect the Web2 and Web3, as well as the online and offline worlds, to achieve cross-border value creation.

The RWA (Real World Asset) protocol ecosystem planned by NFKings aims to create a bridge connecting real-world assets with the Web3 world. Through blockchain technology, NFKings hopes to achieve the digitization, liquidity, and programmability of assets, thereby unlocking new value for these assets.

The company's innovation lies in combining real-world assets with NFTs, giving assets new forms and attributes. The RWA protocol ecosystem of NFKings is expected to attract more traditional assets into the Web3 world, promoting the integration of physical assets and digital assets.

Industry insiders believe that NFKings' innovative exploration reflects the demand for real-world assets in the Web3 world. Through the RWA protocol ecosystem, NFKings is expected to bridge the gap between the digital world and the real world, promoting further development of the Web3 ecosystem.

4. Economic Dynamics

1. The U.S. economic growth is slowing down, and inflationary pressures persist.

Economic Background: The US economic growth further slowed in the first quarter of 2025, with an annualized quarterly GDP rate of only 0.6%, down from 2.3% in the previous quarter. Despite a robust job market, consumer spending is weak, corporate investment is decreasing, and the trade deficit is widening, all dragging down economic growth. Meanwhile, inflationary pressures persist, with the core PCE price index rising 4.7% year-on-year in April, exceeding the Federal Reserve's target level of 2%.

Important events: In response to persistently high inflation, the Federal Reserve raised interest rates by 25 basis points again in May, adjusting the target range for the federal funds rate to 5.25%-5.5%. Federal Reserve Chairman Powell stated that further actions will be taken based on economic data until inflation rates show a significant decline. Meanwhile, the U.S. government announced a 50% tariff on imported steel, aimed at protecting the domestic steel industry.

Market Reaction: Investors' concerns about slowing economic growth and persistently high inflation have intensified. U.S. stocks experienced significant volatility in May, with the S&P 500 index falling by 1.1%. The bond yield curve further inverted, reflecting market worries about a recession. The dollar index rose by 1.4% during the month, indicating investors' demand for safe-haven dollars.

Expert Opinion: Former Federal Reserve Vice Chairman Stanley Fischer stated that the Federal Reserve needs to continue raising interest rates to curb inflation expectations, but must also proceed cautiously to avoid triggering an economic hard landing. Goldman Sachs Chief Economist Jan Hatzius believes that the U.S. economy is entering a "stagflation" state, characterized by low growth and high inflation. He expects the Federal Reserve will eventually raise interest rates to above 6%.

2. The tension in China-US trade has escalated again.

Economic Background: The economic relationship between China and the United States has been under tension in recent years. Although both sides had reached agreements on trade issues, the implementation of these agreements has been questioned. Recently, the trade relationship between China and the United States has deteriorated again, posing new uncertainties for the global economic outlook.

Important Event: U.S. President Trump accused China of violating the previously reached trade agreement between the two parties and announced new tariffs on goods imported from China. This move immediately triggered strong opposition and countermeasures from the Chinese government. The confrontation between the two sides in trade, technology, and finance continues to escalate, raising concerns about disruptions in the global supply chain and turmoil in the financial markets.

Market reaction: The escalation of trade tensions has led to significant volatility in global financial markets. US stocks experienced a sharp decline in May, with the S&P 500 index dropping by 4.5%. The US dollar index surged, reflecting investors' demand for safe-haven assets. Commodity prices also showed a noticeable decline. Global manufacturing PMI data indicates that trade tensions are weakening manufacturing activity.

Expert Opinion: Robert Barro, an economics professor at Harvard University, believes that the China-U.S. trade war will cause serious damage to the global economy and may trigger a global economic recession. He calls for both sides to resolve their differences through negotiation. Former U.S. Treasury Secretary Henry Paulson stated that the trade policy of the Trump administration has serious flaws that could harm the long-term economic interests of the United States.

3. The European Central Bank raised interest rates by 75 basis points to address inflationary pressures.

Economic Background: The Eurozone economy slowed down in the first quarter of 2025, with a year-on-year growth of only 0.2%, down from 0.7% in the previous quarter. Although the job market remains robust, consumer confidence is weak and business investment has weakened. Meanwhile, inflationary pressures remain high, with the Eurozone inflation rate reaching 7.5% in April, well above the European Central Bank's target of 2%.

Important event: To curb inflation expectations, the European Central Bank raised interest rates by 75 basis points in May, increasing the deposit rate to 3.25%. This is the sixth consecutive rate hike by the European Central Bank, reflecting its determination to combat inflation. ECB President Lagarde stated that if inflation remains high, further rate hikes will continue.

Market reaction: European stock markets fell sharply in May, with the STOXX Europe 600 index declining by 2.8%. The euro fell by 1.2% against the dollar during the month, reflecting investors' concerns about the economic outlook in Europe. The bond yield curve further inverted, signaling an increased risk of economic recession.

Expert Opinion: David Faulkner, Chief Economist of Deutsche Bank, believes that the pace of interest rate hikes by the European Central Bank may be too aggressive and could lead to a hard landing for the eurozone economy. He expects the eurozone economy to enter a mild recession in the second half of 2025. Philippe Gabbay, Chief European Economist at Société Générale, stated that the European Central Bank needs to seek a balance between curbing inflation and avoiding an economic recession, which will be a difficult process.

4. The new UK government has launched a bold cryptocurrency plan.

Economic Background: After taking office, the new Prime Minister of the UK, Farage, launched a series of policies aimed at revitalizing the British economy. Among these, the cryptocurrency plan has attracted significant attention and is seen as an important step for the UK to attract fintech investment and reshape its status as a financial center.

Important event: The Farage government has announced that it will allow the Bank of England to hold Bitcoin as a reserve asset and provide tax incentives for cryptocurrency traders. This plan aims to establish the UK as a global cryptocurrency hub. Meanwhile, the UK's Financial Conduct Authority will develop a regulatory framework for cryptocurrencies to provide legal certainty for industry development.

Market Reaction: The cryptocurrency market has reacted enthusiastically to the new government's plans in the UK. The price of Bitcoin briefly rose by nearly 5% after the announcement. Cryptocurrency exchanges and related businesses have indicated they will consider expanding operations in the UK. However, some analysts have expressed doubts about the feasibility of the plan, worrying it may pose risks to financial stability.

Expert Opinion: Gene Friedman, a columnist for the Financial Times, believes that the UK government's cryptocurrency plan is a bold and forward-looking initiative that will help attract innovative enterprises and talent. However, he also warns that a strict regulatory framework needs to be established to prevent money laundering and other illegal activities. Former Bank of England Governor Kim Foulis stated that there are risks associated with central banks holding Bitcoin as a reserve asset and that careful assessment is required.

5. The Indian government has released a regulatory framework for cryptocurrencies.

Economic Background: India is one of the largest cryptocurrency markets in the world, but has long lacked clear regulatory policies, creating uncertainty for the industry's development. To regulate cryptocurrency trading, the Indian government has finally launched a cryptocurrency regulatory framework after extensive research.

Important Event: The Indian Ministry of Finance has released the "Cryptocurrency Regulatory Framework," clearly defining cryptocurrency as an asset class and bringing it under the purview of anti-money laundering regulations. The framework also stipulates that all cryptocurrency transactions must be conducted through government-approved exchanges and be subject to a 30% capital gains tax.

Market Reaction: Indian cryptocurrency exchanges and investors have mixed responses to the new framework. Some exchanges believe that regulation will help the long-term healthy development of the industry and attract more institutional investors. However, some investors are concerned that the 30% tax rate is too high and may suppress cryptocurrency investments. Overall, the market welcomes the introduction of regulation, believing it will provide certainty for industry development.

Expert Opinion: C.B. Bhagat, former chairman of the National Stock Exchange of India, believes that the new framework is a good starting point, but it still needs further improvement, especially in preventing manipulation and protecting investors. Former Deputy Governor of the Reserve Bank of India, Viral Acharya, stated that cryptocurrency regulation should be consistent with the traditional financial system to prevent regulatory arbitrage.

5. Regulation & Policy

1. The U.S. government urges the Supreme Court to dismiss the Coinbase users' lawsuit against the IRS for obtaining crypto records.

The U.S. government submitted documents to the Supreme Court requesting the dismissal of Coinbase user James Harper's appeal against the Internal Revenue Service (IRS) for obtaining his cryptocurrency transaction records.

Policy Background The IRS, as the domestic tax collection agency in the United States, is responsible for overseeing taxpayers' compliance with tax regulations. With the increase in cryptocurrency trading activities, the IRS seeks to obtain transaction records of exchange users to monitor potential tax evasion. However, this has sparked debates over privacy rights and the extent of government regulatory authority.

Policy Content In a document submitted on May 30, U.S. Attorney General D. John Sauer argued that Coinbase user James Harper does not have the protection granted by the Fourth Amendment for his financial records held at the exchange. The government cited precedents such as United States v. Miller, emphasizing that users have no reasonable expectation of privacy regarding financial records held by third parties, and that Coinbase's privacy policy clearly warns that information may be shared with law enforcement.

Market Reaction The outcome of this lawsuit will affect the level of privacy protection for users of cryptocurrency exchanges. If the Supreme Court supports the government's position, the IRS will gain broader authority to obtain user transaction records, enhancing the regulation of cryptocurrency trading. However, it may also trigger further industry attention on privacy rights.

Expert Opinion Privacy rights experts believe that this case will set an important precedent for the privacy rights of cryptocurrency transactions. Some experts support the government's access to records to combat tax evasion, but there are also concerns that excessive regulation will hinder the development of the cryptocurrency industry. The industry is calling for a clear regulatory framework that balances privacy rights with anti-money laundering needs.

2. Hong Kong introduces regulatory framework for stablecoins, requiring issuers to obtain licenses.

The Hong Kong Monetary Authority has introduced stablecoin regulations, requiring issuers of stablecoins pegged to the Hong Kong dollar to obtain licenses to protect the public and investors, in line with global regulatory trends.

Policy Background Stablecoins play an important role as a bridge between cryptocurrencies and fiat currencies in the cryptocurrency ecosystem. However, their issuance and operation lack regulation and pose potential risks. As an international financial center, it is necessary for Hong Kong to establish a regulatory framework for stablecoins to align with global regulatory trends.

Policy Content According to the new regulations, any attempt to issue a stablecoin pegged to the Hong Kong Dollar in Hong Kong must first obtain a license from the Hong Kong Monetary Authority. Issuers are required to meet prudent entry thresholds, including sufficient reserve assets, sound risk management, and internal control systems. The regulations also stipulate ongoing prudent regulatory requirements.

Market Reaction This regulation is conducive to improving the transparency and trust of stablecoins, laying a foundation for the healthy development of the stablecoin market in Hong Kong. However, it may also increase compliance costs and market access thresholds for issuers. Some existing small stablecoin issuers may find it difficult to meet the new requirements.

Expert Opinion Regulatory experts believe that the regulation reflects the Hong Kong Monetary Authority's prudent stance on cryptocurrency regulation. It helps to prevent operational risks associated with stablecoins and gaps in investor protection, thereby enhancing market confidence. However, it is also necessary to maintain good communication with the industry and formulate practical and feasible detailed rules.

3. The Supreme Court of India calls for the establishment of a cryptocurrency regulatory framework

The Supreme Court of India described the current cryptocurrency regulations as "completely outdated" during a hearing on Friday, calling for the government to formulate a comprehensive regulatory framework as soon as possible.

Policy Background The Indian government has a cautious attitude towards cryptocurrencies and has briefly banned cryptocurrency trading. In 2022, India began imposing a 30% capital gains tax and a 1% transaction tax on cryptocurrencies. However, due to the lack of a comprehensive regulatory framework, the legal status and regulatory requirements for cryptocurrencies remain unclear.

Policy Content The Supreme Court pointed out at the hearing that the existing cryptocurrency regulations are outdated and unable to effectively manage the growing cryptocurrency market. The court urged the government to quickly establish a comprehensive regulatory framework that clarifies the legal status of cryptocurrencies, anti-money laundering requirements, investor protection measures, and more.

Market Reaction This ruling reflects the Indian government's and regulatory authorities' emphasis on cryptocurrency regulation. A clear regulatory framework will provide legal certainty for the development of the cryptocurrency industry. However, overly strict regulations may also stifle innovation.

Expert Opinion Cryptocurrency legal experts believe that India needs to balance innovation with risk management. Regulation should encourage legitimate innovation while protecting investor rights and preventing criminal activities. Experts suggest that the government maintain communication with the industry to develop a practical regulatory framework.